{"id":59330,"date":"2025-11-18T23:17:10","date_gmt":"2025-11-18T23:17:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/59330\/"},"modified":"2025-11-18T23:17:10","modified_gmt":"2025-11-18T23:17:10","slug":"suffolk-files-to-force-san-jose-tower-owner-into-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/59330\/","title":{"rendered":"Suffolk Files To Force San Jose Tower Owner Into Bankruptcy"},"content":{"rendered":"<p dir=\"ltr\">A high-profile San Jose apartment tower faces legal and financial pressure on two fronts, as its general contractor has moved to force the owner into involuntary bankruptcy just as the building heads toward possible foreclosure,\u00a0<a href=\"https:\/\/www.mercurynews.com\/2025\/11\/17\/san-jose-home-economy-build-apartment-house-develop-property-court\/\" target=\"_blank\" rel=\"nofollow noopener\">The Mercury News reported<\/a>.\u00a0<\/p>\n<p>                        <img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2025\/10\/placeholder.png\" loading=\"lazy\" alt=\"Placeholder\"\/><\/p>\n<p>\n      The Fay at 10 E. Reed St. in San Jose.\n    <\/p>\n<p dir=\"ltr\"><a class=\"tag tag-1599\" href=\"https:\/\/www.bisnow.com\/tags\/suffolk-construction\" target=\"_blank\" data-tag-id=\"1599\" rel=\"nofollow noopener\">Suffolk Construction<\/a> has filed a Chapter 7 petition against two real estate firms, Scape and Morro USA, the developers behind The Fay, a 23-story tower at 10 E. Reed St. in downtown San Jose. Suffolk looks to recoup $9.3M in fees for completed work on the tower that the owner allegedly failed to pay.\u00a0<\/p>\n<p dir=\"ltr\">The filing lands as the property faces foreclosure tied to a <a href=\"https:\/\/www.mercurynews.com\/2025\/07\/08\/san-jose-home-economy-house-build-property-develop-real-estate-loan\/\" target=\"_blank\" rel=\"nofollow noopener\">$182.5M construction loan<\/a>, which went into default in July.\u00a0<\/p>\n<p dir=\"ltr\">An affiliate of the UK-based Scape purchased the property for $16.5M in 2020. In 2021, Scape, which focuses primarily on student housing, obtained construction financing for the residential tower. Morro, a US-based subsidiary of Scape, developed the property. \u00a0<\/p>\n<p dir=\"ltr\">Neither Suffolk nor Morro responded to Bisnow\u2019s request for comment.<\/p>\n<p dir=\"ltr\">When it opened in December 2024, San Jose had <a href=\"https:\/\/www.mercurynews.com\/2024\/12\/05\/san-jose-house-home-build-develop-economy-real-estate-property-jobs\/\" target=\"_blank\" rel=\"nofollow noopener\">staked hopes on The Fay<\/a>\u00a0to revive a flagging downtown. Meanwhile, San Jose\u2019s broader multifamily market showed signs of renewed investor interest.\u00a0<\/p>\n<p dir=\"ltr\">Earlier this month, the 160-unit Atrium Garden <a href=\"https:\/\/www.bizjournals.com\/sanjose\/news\/2025\/10\/24\/atrium-garden-san-jose.html\" target=\"_blank\" rel=\"nofollow noopener\">sold for $18.5M<\/a>\u00a0in North San Jose. In August,\u00a0<a class=\"tag tag-1920\" href=\"https:\/\/www.bisnow.com\/tags\/greystar\" target=\"_blank\" data-tag-id=\"1920\" rel=\"nofollow noopener\">Greystar<\/a> sold the 948-unit Park Kiely complex for $370M. It was the largest apartment acquisition in Santa Clara County so far in 2025. Earlier in the summer, Post Glen Group and Affordable Housing Access <a href=\"https:\/\/therealdeal.com\/san-francisco\/2025\/09\/02\/san-jose-affordable-housing-complex-sells-for-370-million\/\" target=\"_blank\" rel=\"nofollow noopener\">bought a south San Jose<\/a>\u00a0apartment complex for $61M.\u00a0<\/p>\n<p>San Jose\u2019s multifamily vacancy rate ticked up in\u00a0the third quarter to 3.5%, while rent grew by 3.2%,\u00a0<a href=\"https:\/\/mktgdocs.cbre.com\/2299\/047fb598-1036-4f07-87c3-b9406ae0de08-134181181\/Q3_2025_Bay_Area_Multifamily_F.pdf\" target=\"_blank\" rel=\"nofollow noopener\">according to CBRE<\/a>. The average sale price per unit dropped to $400K.<\/p>\n","protected":false},"excerpt":{"rendered":"A high-profile San Jose apartment tower faces legal and financial pressure on two fronts, as its general contractor&hellip;\n","protected":false},"author":2,"featured_media":59331,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[36143,36145,17746,88,90,89,36144,36142],"class_list":{"0":"post-59330","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-jose","8":"tag-bay-area-multifamily","9":"tag-morro-usa","10":"tag-multifamily","11":"tag-san-jose","12":"tag-san-jose-headlines","13":"tag-san-jose-news","14":"tag-scape","15":"tag-suffolk-construction"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/59330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=59330"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/59330\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/59331"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=59330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=59330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=59330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}