Z&L Properties, mired in lawsuits over a luxury condominium project with unsold units in Downtown San Jose, has listed the vacant units for rent.
An affiliate of the China-owned firm now seeks tenants for about 200 unfilled units at its 24-story tower at 188 West St. James Street, the San Jose Mercury News reported.
The 320-unit highrise is one of two that the Z&L affiliate built in 2021 in San Pedro Square. The unoccupied eastern tower is up for sale. Condos in the western tower began selling a year later.
The western tower, whose more than 200 unsold condos went on the market in March last year for $300 million, became the subject of a legal battle between the developer and building’s homeowners association, which filed default notices over unpaid dues.
Last spring, the developer sued bidders who had violated a court restraining order and bought 10 condominiums auctioned at the complex by an HOA trustee for around $32,000.
To staunch the bleeding, Z&L has employed Tripalink to rent out its unpurchased units. As an enticement, Tripalink is offering two months of free rent, according to its website.
Rates range from $8,333 to $10,000 a month, according to the website Apartments.com. Leases are moving fast, according to Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.
“The pivot from selling condos to renting makes a lot of sense right now,” Staedler told the Mercury News.
The western tower is embroiled in legal battles on two fronts against FPP MB, the Z&L affiliate, according to the newspaper. As many as nine hearings, stretching into the spring of next year, are on the docket.
One battle involves the landlord’s move to negate the auction sales of the condominiums. The other battle involves claims by some homeowners that living conditions have become “dangerous.”
The Z&L affiliate said it’s aware of some of the building flaws, which are being addressed.
“Petitioners (the HOA members) contend that until recently one of the three elevators has commonly been out of service, the building’s boiler system was not set up properly and was not properly maintained, there is frequent flooding in the below-ground garages, and the boiler and HVAC systems were not properly installed, tested or maintained,” FPP stated in the court filing.
It was late last year that Z&L, owned by disgraced Chinese developer Zhang Li, faced foreclosure for failing to pay homeowner association dues for 190 unsold units at the twin tower complex. The Z&L Properties affiliate that owns the unsold condos in the west tower had in December owed unpaid assessments of more than $1.3 million.
— Dana Bartholomew
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