Google’s Campus Proposal Sparks A Summer Of Deals In San Jose
Downtown San Jose had a busy summer following news of Google’s proposed 8M SF campus. Google’s campus near Diridon Station is expected to have significant economic benefits to the city and help move forward much-needed infrastructure improvements.
There has been an increase in commercial real estate transactions during the summer after a relatively slow start to the year. Big investors are getting into San Jose and additional development has been proposed.
Additionally, other tech firms have been expanding within San Jose and sparking additional office transactions. Adobe said it will expand its San Jose headquarters. It is buying 333 West San Fernando St. next to its 900K SF headquarters at 345 Park Ave. and will employ an additional 3,000 workers. Adobe employs about 2,500 in downtown San Jose. It also leased 65K SF at 10 South Almaden Blvd. for five years and expects to move in starting Nov. 1.
Trammell Crow affiliate TC Agoge Associates, which has been buying up properties as part of the Google development plan, added six more parcels to its portfolio in June and two more in August, paying $3.2M for 59 South Autumn St. Google and its development partner have purchased about 19 parcels for about $144.7M around the Diridon Station and SAP Center. Google also is working out a deal with the city to acquire 16 parcels.
TMG Partners and Valley Oak Partners plan to build a 1M SF office complex just north of the SAP Center along North Autumn Street that could support up to 5,000 employees. AEW Capital Management bought an 11-story office building at 303 Almaden for $80.2M ($509/SF) in July, breaking a new record for price per square foot.
Multifamily, Hospitality Investors Have Big Plans
Multifamily developers also have stepped in with new plans. Equus Capital Partners wants to build a 24-story mixed-use tower as part of an expansion to its CityView Plaza complex in downtown San Jose. The tower, designed by Steinberg Architects, would contain 260 housing units over 1,550 SF of retail at the corner of Almaden Boulevard and Park Avenue. The building will have a mix of studios, one-, two- and three-bedroom units. It will contain 319 parking spots with over 60 as tandem spots. Motorcycle parking and bicycle parking will be included.
Essex Apartment Homes bought 360 Residencies in August for about $134M from Capri Capital affiliate Gateway Nathaniel. The 23-story apartment tower with ground-floor retail is at 360 South Market St. near the city’s convention center. The building contains 213 units and 11K SF of ground-floor retail. The seller originally bought the property in 2012 for $118M.
San Jose hotels also have changed hands in quick succession this summer with Blackstone Group purchasing the 236-room Hyatt Place in San Jose for $62M in June, and South Korea-based Aju Hotels and Resorts through Aju Hotel Silicon Valley buying the Westin San Jose in June for $64M from SCH Hotel, an affiliate of Wolff Urban Development.
Kade Development, which paid $4M for a 37,400 SF lot at 292 Stockton Ave. during an auction, has plans to build a hotel. The land is next to the Amtrak and Caltrain tracks that lead into Diridon Station.