A new mixed-use development across the street from a San Jose site with recent activity is re-imaging a two-story commercial building into a 22-story residential tower that is looking to reshape downtown San Jose’s South First Street.
According to a report by the San Jose Mercury News, the redevelopment project, proposed by a joint venture between the Bader family, which owns the site, and Alterra Worldwide, is envisioning a 350-unit building with around 5,100 square feet of retail on the ground floor. The project, called 27West, is looking to demolish a 15,000 square foot structure located at 27 South First Street that is in the hearth of the downtown district brimming with activity.
“This development is a critical component to revitalizing the Fountain Alley area of First and Second streets,” said Erik Schoennauer, a principal and partner with Schoennauer Co., a real estate planning and development consulting firm in an interview with the Mercury News. “The city of San Jose has been trying to do that for decades.”
This part of the city has recently been in the news. Over the last few months a joint venture comprised of an entity associated with Gary Dillabough, a managing partner with Alameda-based Navitas Capital and formerly with Menlo Park-based Westly Group, and WeWork, purchased much of the site across the street for around $56.3 million. The parcel includes the historic Bank of Italy building and adjacent parking lots. There is no update at this time about their plans for the location.
The proposal for 27West follows a number of residential project that are either under way or planned for the Silicon Valley city, which has received an inordinate amount of attention since Google and Apple announced plans to build millions of square feet of office space there.
Some of the recent projects include a 130-unit development on the outskirts of the Diridon Planning Area in downtown San Jose on Auzerais Avenue. The project would combine three parcels of land at 383 Delmas Avenue and 425 and 433 Auzerais Avenue. Currently, the 1.02-acre site is developed with a single-family residence, an art studio and a commercial warehouse. The existing structures would be demolished to make way for a new six-story, 130-unit multi-family residential development.
In December of 2017, Trumark Homes spent $21 million to acquire a land parcel in downtown San Jose with plans for a new community adjacent to the popular San Pedro Square Marketplace. The community will offer 78 new townhomes.
Earlier this year, Terrascape filed for a development permit to build two 19-story residential towers to be located in San Jose not far from a growing collection of other residential communities and offices as well as the city’s busy San Pedro Square. The towers would add 653 residential units to the downtown core.
And also announced this year is KT Urban’s proposed development called The Aviato, an 18-story, 302-unit development that would include around 10,000 square feet of retail on the ground floor. This project is planned for 199 Bassett Street in San Jose, just east of the Guadalupe Freeway—Highway 87 and west of Coleman Avenue.
All of this proposed activity followed by the commercial announcements and the city’s connectivity to the rest of the region has made San Jose a hot commodity. In January, Seattle-based Redfin announced it’s 6th annual list of hottest neighborhoods across the country, and nine of the top 10 were in the San Jose metro area.
“While the San Francisco Peninsula has traditionally been the hottest of the hot places, we’re seeing it become unaffordable for even the tech giants that helped create its demand in the first place,” said Redfin Silicon Valley agent Kalena Masching in a statement. “The result has been a tech-worker migration to the South Bay charged by people looking for relative affordability, highly rated schools, short commutes and access to jobs.”