UPDATE: A lender is rapidly advancing towards a foreclosure on a $20 million loan for The Neo at First, a 50-unit apartment complex located at 975 South First St. in San Jose. This urgent development comes as the property has been in default since September, according to Santa Clara County real estate records.
CTBC Bank Corp. is set to auction the apartment complex in early 2026 if no bidders step forward. This move raises significant concerns about the future of affordable housing in the area, just blocks from the vibrant SoFA district.
The Neo at First was completed in 2020 after the ownership group, led by CEO Xuhan Yu, purchased the land for $5.2 million in 2017. The looming foreclosure highlights the broader challenges faced by multifamily residential properties in the Bay Area, where many owners struggle with high interest rates and difficult refinancing conditions.
The urgency of this situation is underscored by a similar case: the Fay apartment complex at 10 East Reed St., which also went into default on a $182.5 million construction loan in July. The Fay, a 23-story tower with 336 units, was anticipated to invigorate downtown San Jose but now joins a list of properties facing financial turmoil.
Despite these setbacks in the city’s core, the apartment market in South San Jose shows signs of resilience. Recently, a Sacramento-based nonprofit acquired Ascent, a 650-unit complex, for $322.8 million, indicating a potential shift in market dynamics.
The current landscape is troubling for many property owners, with rising interest rates exacerbating the difficulty of meeting mortgage obligations. As a result, a growing number of multifamily properties across the Bay Area are slipping into default.
As CTBC Bank prepares for the auction, the community watches closely. What happens next could set a precedent for future housing developments and the overall health of San Jose’s real estate market. Keep an eye on this developing story as it unfolds.
