San Jose Apartment Complex Value Plummets After Loan Failure
What happened
The Neo on First, an apartment complex located at 975 South First Street in San Jose, has suffered a significant plunge in value. The decline is attributed to a failed loan connected to the property. This event reflects potential stress in the Bay Area's commercial real estate market.
Why it matters
- The 50-unit complex is owned by a Cupertino-based developer run by an individual named Xuhan You. - The developer has defaulted on a $21 million loan held by CTBC Bank, which is now pursuing foreclosure. - A recent appraisal from Integra Realty Resources valued the property at around $23 million, a decrease of nearly 21% from a Cushman & Wakefield valuation three years prior. - The owner has filed for bankruptcy and is involved in legal action in Santa Clara County court in an attempt to prevent the foreclosure. - This situation is part of a larger trend of distress in downtown San Jose's multifamily market, as another nearby complex, The Fay, was recently foreclosed on with a valuation far below its construction loan. - Broader market data for the Bay Area in late 2025 showed the average sales price per multifamily unit had fallen by 18% year-over-year. - The average capitalization rate for Bay Area multifamily properties has been increasing, signaling a shift in investor expectations and perceived risk. - The Neo on First was built in 2020 and, in addition to apartments, contains ground-floor retail and commercial space.
Key numbers
- The Neo on First, an apartment complex located at 975 South First Street in San Jose, has suffered a significant plunge in value.
- - The 50-unit complex is owned by a Cupertino-based developer run by an individual named Xuhan You.
- The developer has defaulted on a $21 million loan held by CTBC Bank, which is now pursuing foreclosure.
- A recent appraisal from Integra Realty Resources valued the property at around $23 million, a decrease of nearly 21% from a Cushman & Wakefield valuation three years prior.
Quick answers
What happened in San Jose Apartment Complex Value Plummets After Loan Failure?
The Neo on First, an apartment complex located at 975 South First Street in San Jose, has suffered a significant plunge in value. The decline is attributed to a failed loan connected to the property. This event reflects potential stress in the Bay Area's commercial real estate market.
Why does San Jose Apartment Complex Value Plummets After Loan Failure matter?
The 50-unit complex is owned by a Cupertino-based developer run by an individual named Xuhan You. The developer has defaulted on a $21 million loan held by CTBC Bank, which is now pursuing foreclosure. A recent appraisal from Integra Realty Resources valued the property at around $23 million, a decrease of nearly 21% from a Cushman & Wakefield valuation three years prior. The owner has filed for bankruptcy and is involved in legal action in Santa Clara County court in an attempt to prevent the foreclosure. This situation is part of a larger trend of distress in downtown San Jose's multifamily market, as another nearby complex, The Fay, was recently foreclosed on with a valuation far below its construction loan. Broader market data for the Bay Area in late 2025 showed the average sales price per multifamily unit had fallen by 18% year-over-year. The average capitalization rate for Bay Area multifamily properties has been increasing, signaling a shift in investor expectations and perceived risk. The Neo on First was built in 2020 and, in addition to apartments, contains ground-floor retail and commercial space.
