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.
- 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.
