SAN JOSE – Potential buyers of condominiums in San Jose and Fremont face the prospect of losing large upfront payments on homes, subject to fraud court decisions involving a bankrupt Bay Area developer.
These are condominium projects in San Jose and Fremont, which were developed by Silicon Sage Builders and CEO Sanjeev Acharya, who are accused of fraud by federal regulators.
Potential home buyers are concerned that a federal judge may uphold a recommendation from a court-appointed manager to complete the two residential projects, which will nullify home buyers’ deposits.
Marwan Nabulsi and Rina Nabulsi, husband and wife, are spearheading potential buyers’ efforts to save their holdings on the two projects.
These are Silicon Sage projects: The Almaden, a 91-unit residential complex at 1821 Almaden Road in San Jose; and Savant in Irvington, a 93-unit residential project at 42111 Osgood Road in Fremont.
“(Marwan and Reena Nabulsi) are part of a group of individuals who made cash deposits for the purchase of condominium units in the Almaden and Osgood districts, which are currently under the control of the recipient,” according to documents filed with the US District Court in San Francisco. …
The main problem investors face is that the court-appointed manager has struck a deal with Acres Capital, the main lender of the two projects. The deal, proposed by the recipient, will allow Acres to complete the construction of two condominium projects so that they can be sold.
The proposal, however, would allow Acres to cancel a number of financial obligations associated with the two condominium projects, including the cancellation of purchase agreements that prospective buyers reached with Acharya and Silicon Sage Builders prior to Securities’s fraudulent proceedings. and exchange commission.
San Jose and Fremont condos are among the many properties in the Bay Area that were originally proposed or developed by Acharya and Silicon Sage Builders. The SEC has accused Acharya and Silicon Sage of fraud. Silicon Sage went to court.
“Acres needs to cancel certain deposit contracts so that the company can sell completed condominiums without having to sell them to original buyers or return deposits,” Reena and Marwan Nabulsi said in a November 12 court hearing.
Potential condominium buyers have argued that Acres and the homeowner are working together to cancel at least 16 purchase agreements across two condominium projects.
In a November 12 filing, Acres called on the court to approve the recipient’s plan as the plan offers a potential solution to complete two developments.
“(The Manager’s Plan) represents the best alternative for rebuilding the Osgood and Almaden projects and the most realistic route to completing both projects,” the court file says.
However, potential condominium buyers could lose significant money if US District Court Judge Susan Ileston agrees with Akes and Superintendent David Stapleton.
As one example of the potential amount of lost deposit money, Marwan Nabulsi stated that he paid Acharya $ 995,000 as a deposit for two apartments in a condominium in San Jose.
A court hearing is scheduled for December 3, which could lead to a final decision on the future of the two condominium projects.
Some things are certain: significant sums of money have been invested in both condominium projects.
In October 2018, major lender Acres provided $ 45 million to fund the Fremont condominium project and $ 41.9 million to build a condominium in San Jose, court documents said.
In addition, in 2021, to keep projects afloat, Acres provided an additional $ 6.9 million for the Fremont project and $ 8.5 million for the development of San Jose.
Despite all these efforts, both projects face an uncertain future and no guarantees that they can be completed anytime soon. And the development completion costs are significant.
“The completion of Almaden (a condominium in San Jose) will cost $ 19.2 million and the completion of Osgood (the Fremont development) $ 10.5 million,” Greg Hayes, managing director of Acres Capital, said in court filings.