SAN JOSE — A lender is moving forward with plans to foreclose on a delinquent loan and seize ownership of a San Jose apartment complex near the city’s downtown in the next several weeks.
The Neo at First, a 50-unit apartment complex at 975 South First St. and just a few blocks from the SoFA district, went into default on its loan in September, Santa Clara County real estate records show. CTBC Bank Corp. provided $20 million in financing for the four-story apartment building, which was completed in 2020.
CTBC Bank intends to auction off the property to the highest bidder in early 2026. The lender is poised to foreclose on the $20 million loan and take back the property should no bidders emerge.
A Cupertino-based business entity owns the complex. Xuhan Yu is listed as the entity’s chief executive officer, according to state public documents.
In 2017, The Neo at First ownership group paid $5.2 million to buy several parcels that provided the land for the eventual apartment complex, county records show.
The Neo is a few blocks from another San Jose apartment property that is also in default on its financing.
In July, The Fay apartment complex at 10 East Reed St. in downtown San Jose went into default on its $182.5 million construction loan, county real estate records show.
The Fay is a 23-story residential tower with 336 units that opened with much fanfare in December 2024 as a housing complex that was expected to help fuel a downtown San Jose revival.
In contrast to these difficulties in and near the city’s urban core, the apartment market is showing signs of strength lately in South San Jose.
On Dec. 22, a Sacramento-based nonprofit paid $322.8 million for Ascent, a 650-unit apartment complex at 5805 Charlotte Dr., documents filed in Santa Clara County on Dec. 22 show.
In September, the 234-unit ViO apartment complex across the street at 5700 Village Oaks Dr. was bought for $100 million.
Ascent was bought at a price of about $496,500 per unit. That is slightly above the price of $427,400 a unit for the ViO apartment complex, which is across the street.
Despite these signs of apartment market strength in South San Jose, a growing number of multifamily residential apartment properties in the Bay Area have tumbled into default on their mortgages.
Relatively high interest rates have made it tough to refinance existing loans, leaving the apartment owners stuck with burdensome mortgage payments. The loan default problems are particularly acute in Oakland.
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