Development Projects Converging in Mountain View

Mountain View, San Antonio Shopping Center, Federal Realty, Silicon Valley, Merlone Geier, The Village, Decron Properties, Greystar, SummerHill

By Neil Gonzales

It’s no surprise that Mountain View sees a lot of investment and development activity given its central location in Silicon Valley, one of the hottest markets in the world. But the pace of activity seems to have picked up a notch in just the past several weeks with various acquisitions and projects moving forward.

[contextly_sidebar id=”EhuZdpIoob2sVytEWYp4szB6BWIvCkqP”]One of the most recent real estate deals is Federal Realty Investment Trust’s purchase of the 376,000-square-foot San Antonio Shopping Center near the intersection of El Camino Real and San Antonio Road—an already fast-transforming spot in town with the adjacent The Village at San Antonio Center, which is heading into its next phase in the construction of an upscale hamlet of restaurants, shops, modern office spaces, high-end apartments, a hotel and a community park.

On Jan. 12, Federal Realty, an equity real estate investment trust based in Rockville, Md., announced the acquisition of a controlling interest in the San Antonio Shopping Center for $62.2 million (about $165 a square foot).

“We’re a continuation of what we’ve been seeing in the city for a while,” Jeff Berkes, Federal Realty’s West Coast president, told The Registry. “The whole Bay Area is one of the best real estate investments in the country, and that part of the Peninsula is among the top handful of submarkets because of the job growth.”

Mountain View is also appealing because of the big technology companies based there, such as Google and LinkedIn, and the city’s proximity to Stanford University in neighboring Palo Alto, Berkes said.

Acquired from a private family, the San Antonio Shopping Center sits on 33 acres and features nearly 30 national, regional and local tenants, including anchors Walmart and Kohl’s. It marks Federal Realty’s first foray into Mountain View, although the company already has a strong retail presence in Silicon Valley. It owns the popular shopping and dining district Santana Row and the renovated Westgate Center, both in San Jose, as well as the Old Town Center in Los Gatos.

The transaction in Mountain View was completed through a combination of about 58,000 downREIT units, $18 million in cash and the assumption of $18.7 million of fixed-rate debt secured by the property, the company said in a news release.

“San Antonio Shopping Center has been on our radar screen for some time due to the size of the property, strength of this trade area and long-term potential,” Berkes said in the release.

“The property holds a lot of additional, exciting opportunities to further improve the merchandising and drive rental growth as leases roll over the coming years,” added Jeff Kreshek, Federal Realty’s West Coast vice president of leasing.

In the immediate term, Berkes told The Registry, “we will step in and do what we typically do, and that’s do some cleanup, site improvements, landscaping and signage. We’re also looking to lease two or three vacant spaces.”

But Federal Realty will start meeting with city leaders and other stakeholders to devise a strategy for the long haul, he said. This strategy will take into account existing tenants and conform to the new San Antonio Precise Plan, which the City Council approved in December and calls for the area to be a diverse regional and community destination with a variety of land uses and transit improvements.

The San Antonio Shopping Center could transform in the style of Santana Row but not anytime soon. “Don’t expect in 2016 to see another Santana Row there,” Berkes said. But certainly, mixed-use development could intensify over phases.

The property’s long-range development will also take into account The Village next door, he said. He described The Village by San Francisco-based Merlone Geier Partners as taking a hodgepodge of commercial spaces and unifying them into an outstanding mixed-use neighborhood.

“Definitely, we will benefit from The Village,” he said, “and there will be an integration and connection between the two properties.”

In December, the council approved the second phase of The Village, a project initiated several years ago. “We are pleased with the outcome and look forward to getting under construction,” Merlone Geier Vice President Michael Grehl said of Phase II, which is expected to begin in the spring and finish in about three years.

This part of The Village would feature about 400,000 square feet of Class A office space, a 167-room hotel, an eight-screen movie theater and a mix of restaurants and shopping opportunities around a large open plaza. The first phase has already brought apartments, a new Safeway, restaurants, boutique shops and offices.

Besides all the activity in and around the corner of El Camino Real and San Antonio Road, Mountain View is seeing plenty of action elsewhere.

Earlier this month, Los Angeles-based real estate investor and developer Decron Properties Corp. purchased the187-unit Highland Gardens apartments at 222 and 234 Escuela Ave. for $86 million (about $460,000 per unit).

Charleston, S.C.-based multifamily developer Greystar is set to build 164 units in buildings up to four stories high with about 10,800 square feet of ground-floor commercial space at 801 El Camino Real West after receiving council approval in December.

A number of other commercial and residential projects are in various stages of planning or construction in Mountain View, including software company Intuit’s 364,000-square-foot office development at 2600 Marine Way and San Ramon-based multifamily developer SummerHill Apartment Communities’ 193-unit project at 2650 El Camino Real West.

“Mountain View is well-located and provides excellent services to its residents, visitors and businesses, so it isn’t a surprise that there is significant interest in real estate investment here,” City Manager Dan Rich said. “It has been under way for a while now. I think [it] is somewhat of a coincidence” that several projects are all happening at about the same time.

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