San Jose housing tower faces auction and foreclosure over failed loan
SAN JOSE — A lender is heading into the final stages of its efforts to seize ownership of The Fay through a foreclosure of a delinquent construction loan totaling $182.5 million.
Documents filed with the Santa Clara County Recorder’s Office show the lender could take back the 363-unit high-rise at 10 East Reed St. in the SoFA district before the end of the year.
Real estate firm Scape, based in England, bought the site for $16.5 million in 2020.
In 2021, the firm obtained a loan from a Madison Realty Capital affiliate to finance construction, county records show. Murro, a Scape brand, developed the 23-story tower.
According to the foreclosure sale notice, the Scape affiliate owes $201.5 million, an amount that includes the loan’s unpaid principal debt, late fees, interest, and penalties.
Scape would have to repay the amount owed in full, or the property could be sold through an auction.
City officials have expressed hope that The Fay’s hundreds of residents could help create heightened economic activity in the nearby retail, restaurant, nightlife, and entertainment hubs.
“A big part of our success has to be residential density,” San Jose Mayor Matt Mahan said during an event in December 2024 to officially mark the opening of The Fay. “This is the first residential high-rise building we’ve seen in a few years and it certainly is not the last.”
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