By Jon Peterson
San Francisco-based Simeon Residential Properties and Chicago-based Kinship Capital are looking at several sale options for its shovel-ready Post Street Tower @ San Pedro Square residential development site in downtown San Jose.
“We are looking at all possible options in the potential sale of this development site. We think that we have created some value with our investment by doing a significant amount of pre-development work to get it all ready to build,” says Nick Thomson, a principal with Kinship.
“We will have to wait and see what kind of response we get on this site. This will be a good test for the market. Ultimately it could be a financial decision as to what some other investors are willing to pay and what works best for us,” says Mike Kim, chief investment officer with Simeon Properties.
There are many options for the current owners. One would be to sell the development site to another investor. The site was purchased last year for $8.8 million from the Washington-D.C.-based AFL-CIO Building Investment Trust.
There is also an opportunity to bring in a new joint venture equity partner or just keep the project and develop it themselves. The site is being marketed by the San Francisco office of Newmark Cornish & Carey. One of the investment advisors on the sale is Michael Taquino, a senior managing director. “This site is located in a very strong market for a residential product. The market fundamentals are that new apartment rental units are exceeding $4 per square foot and condo pricing is at least $800 per square foot,” he said. The plan is to take potential offers on this site over the next four weeks and maybe have a closing sometime in mid-June.
The property is ready to start development right away. It’s a fully entitled site. A total of 202 units could be developed in this project on a high-rise design. This could be either for rental apartments or for-sale condominiums.
“We believe that the future residents of the project would be technology workers who are their 20s and 30s. These Silicon Valley workers have a desire for urban living and view downtown San Jose as a great alternative to living in San Francisco and enduring a brutal commute,” said Thomson. The project is located 10 minutes from Apple, Google and Samsung in North San Jose. There also is the benefit of being located adjacent to San Pedro Square and Cesar Chavez Plaza for shopping, dining, culture and entertainment.
Image courtesy of Studio Current