By Jon Peterson
The iconic Knight-Ridder Inc. sign atop the 344,000-square-foot Fairmont Office Plaza in downtown San Jose will finally change, six years since the San Jose headquartered newspaper publisher was sold.[contextly_sidebar id=”079840afdcc9d78513a95e09dabdba0a”]Los Angeles-based CBRE Global Investors, the new owner of the building, paid $95.6 million to acquire 50 W. San Fernando St. at the end of last year, according to documents from the Orange County Employees Retirement System. The seller was Cleveland-based Forest City Enterprises Inc., a real estate investment trust that had owned the building since 1998. Its proceeds from the sale were $28.8 million, according to public records.
In addition to reconceiving downtown San Jose’s most prominent roof-top sign, CBRE is pursuing a revamp of the property, the top floor of which is San Jose’s venerable Capital Club, a common meeting place for business and social events that has recently undergone a $2.8 million remodeling, too.
“We are planning a total repositioning of the asset,” said Darla Szalla, a principal with CBRE Strategic Partners US. The company expects to add a 4,000-square-foot to 5,000-square-foot fitness center that would only be available to the tenants and offered for free. Other additions would include a centralized security desk and free Wi-Fi in the common areas, she said.
As far as the sign, the company is contemplating two approaches for its update: Offering marketing rights to an existing or new tenant—the building is only 82 percent occupied—or using the space to identify the building itself with its address.
The real estate fund manager has only started its marketing campaign. “It’s our goal that we should be able to move the [property] occupancy into the mid-90s range over the next 24 months. We think that many kinds of tenants will be attracted to the property going forward,” Szalla said.
San Jose Councilmember Sam Liccardo, whose district includes downtown, said he welcomed the change: “I think it’s time that we move on with the sign. It’s been some time that Knight-Ridder has been gone, and it will be good for the city of San Jose for a new name to be on it,” he said.
When Knight-Ridder moved its corporate headquarters to downtown from Miami in the late 1990s, the shift validated Silicon Valley’s gathering stature as the nation’s information technology hub. Former Chairman and Chief Executive Anthony Ridder cited the rise of the Internet and the need for company leaders to “be immersed” in the Silicon Valley business culture as the rationale for the shift, according to an April 1998 report in The New York Times.
Signs can be tricky for landlords because ordinances and what a city allows often change, said Geri Wong, a senior vice president with Cornish & Carey Newmark Knight Frank who is representing 60 S. Market St. in downtown and has done business in downtown for many years. “That sign was a very special sign,” she said. “It was basically that the city wanted to have Knight-Ridder in” that building.
That special status plus the cost to recast the sign made the safest route for the landlord to let it remain until circumstance or some other pressure cause a change, she said. Wong toured the building in the last month. “It has a positive image in the market and is centrally located. They have great views. It needed some internal facelifts with some of the common areas, but all in all it is a nice building in a nice part of downtown with a lot of amenities,” she said.
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