By Meghan Hall
There is a lot of debate as to whether universities will open in the fall, but the project team behind The Grad, San Jose’s first student-oriented high-rise, are ploughing full steam ahead towards the tower’s delivery. The 19-story building—developed by AMCAL Group of Companies and Swenson— will bring 260 units and 1,039 beds to market upon its completion at the end of the summer. Despite the economic and health concerns that coronavirus has brought, the project team is confident in the tower’s ability to lease, given high levels of demand throughout the Silicon Valley market.
The decision to pursue a student-oriented housing development came easy to the project team, given the development site’s close proximity to San Jose State University (SJSU) and increasing university enrollment in the area.
“I was already a fan of SJSU, the place where my parents first met, so when we found out the university was seeing an increase in enrollment at the same time as students were experiencing a shortage of viable and economical options, we saw an opportunity for our companies to fill the gap and provide much-needed housing for the students of our community,” explained Swenson’s President and CEO, Case Swenson. The location and size of the property were a perfect fit for fulfilling this need with the first high-rise urban style building option.”
The 1.5-acre project site is located within one block of SJSU on East San Carlos Street. The top 17 floors will feature apartments, while the lower three floors will house building services and student amenities, as well as a double-height retail space on the ground floor. Individual apartment units come in a variety of one-, two-, three- and four-bedroom floor plans ranging from about 396 square feet of space to more than 1,500 square feet of space. Residences come equipped with washer and dryers, fully-equipped kitchens, and cable and internet. Units are laid out to give students their own private bathroom, with the exception of one, four-bedroom floorplan that is equipped with three bathrooms. Units are also fully furnished—a big perk for students who move frequently with the start and end of the school term.
Common amenities include an outdoor deck and exercise center, swimming pool and spa, cabanas, barbecue grill and bike repair and storage. Other, student-specific features include shared study rooms, computer center, and multipurpose lounge area. The programming of the building will allow for students to live, work and play in one building and is something that the project team predicts will be popular for residents, particularly at a time when Bay Area residents are being encouraged to stay home.
“The Grad is set up to be an all-inclusive environment for students. Its unique high-rise design and the abundance of amenities make it easy for busy students to have everything they need within a secure environment, close to campus,” said Swenson. “The Grad will include a three-story parking deck and ground floor retail, but my favorite features are the amenities, which include an exercise center, a swimming pool with resort-style sundeck and BBQ areas, sports courts, a picnic area, community space for student activities, and lush landscaping. Especially as we are all spending more time at our places of residence, we anticipate high demand for onsite amenities.”
The tower is expected to open for residents mid-August. While the industry has been carefully keeping its eye on multifamily and leasing fundamentals, AMCAL and Swenson’s expectations for the property remain hopeful, not just due to pre-existing demand and the Bay Area’s strong economy, but based on student feedback and outreach, as well. Like many landlords, Swenson emphasized that the project team is taking the necessary precautions to move new tenants in safely.
“Although there were minor construction delays due to the shutdown, we were lucky in that we were able to follow the County’s safety protocols and restart our construction efforts quickly and effectively,” said Swenson. “The Grad is currently on schedule to open for tenants in mid-August and we are partnering with an onsite management company able to provide a proactive approach to promoting safety, wellness, and comfort. While there is still uncertainty around universities reopening for virtual or in-person classes in the fall, we continue to see interest in leasing. Many students who have already signed leases have expressed how excited they are to move in starting in a little over a month and we cannot wait to welcome them home.”
At the beginning of the year, San Jose’s multifamily market was looking strong, aided in large part by unemployment hubs located nearby. According to a report released by Marcus and Millichap at the beginning of the year—the earliest data available—5,500 units were expected to come to market in 2020, and rent was expected to increase 3.3 percent. While it remains to be seen if these predictions will remain true, prior fundamentals are still serving to buoy the San Jose submarket despite uncertainty.