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&L Properties, owned by Chinese developer Zhang Li, faces a potential foreclosure auction for two condominium towers in San Jose after defaulting on a $264 million loan. The double highrises at 188 West St. James Street are set to be auctioned off as early as next month, according to the San Jose Mercury News. This is the latest setback for Z&L, which has struggled with repayment of the loan secured by the property since its issuance in 2019.

    The delinquent loan was used to finance the construction of the Silvery Towers project, containing 600 condominiums. Despite a court filing stating that the issue had been resolved, the developer's owner, FPP MB, an affiliate of Zhang Li, has failed to repay the debt. The unpaid principal debt stood at $169 million in October, and with interest, late fees, penalties, and other costs, the total debt is now over $212.5 million.

    This development failure adds to a growing string of issues for Z&L's properties across San Jose and the Bay Area. One of the towers is involved in a legal dispute between its HOA and Z&L over unpaid fees, while the City of San Jose has imposed property liens against the developer for failing to pay fines related to an abandoned historic church development site.

    The foreclosure auction could result in the loss of two condominium towers, further exacerbating the financial struggles of Z&L Properties. The company's owner, Zhang Li, pleaded guilty to bribery charges in 2023 and was placed under house arrest in London.