San Jose Auto Dealership Location Hits the Market with $31MM Asking Price

San Jose, Cushman & Wakefield, DGDG Dealership, Ford, Volkswagen, GMC, Chevrolet

By Jon Peterson

Over the last two years, the auto industry, just like every other, has gone through some challenging times. Selling cars is a process that has been impacted by the issues surrounding the global supply chain management, and this has impacted sales across the auto industry. One dealership landlord, Kleinman Capital Expressway, LP is now testing the market by offering up for sale the property in San Jose located at 919 Capitol Expressway Auto Mall in San Jose. The asking price is $31.88 million, according to the property’s offering document. Should the pricing be reached, the cap rate on the planned sale would be 2.75 percent.

The entity associated with the seller is a Bay Area family partnership that has owned the property for a long time. The group has assigned the listing to the San Jose office of Cushman & Wakefield. The person working on the marketing of this property is Miki Correa, a director with Cushman & Wakefield.

There are two different parcels involved with the sale of the property, and they amount to a total of 7.18 acres. This land is leased to DGDG 16 LLC, a car dealership. DGDG’s lease started in May of 2021 and runs through May of 2026. The tenant has five five-year renewal options that are set with rent increases. The existing lease is at below market rents, according to some industry estimates, which would provide the new owner a significant value-add opportunity when the lease expires.

The larger parcel covers just under five acres. A Ford dealership, including the showroom and service stations is located on this parcel. The other 2.3 acre site is currently used for surface parking by other Del Grande Group brands such as Volkswagen, GMC and Chevrolet.

The asset that is up for sale has a total of 312,761 square feet, and there are no vacancies in the property. The sale of the asset could represent a long-term investment redevelopment opportunity for the new ownership, as well. The property is now zoned for general commercial, which allows for a broad range of potential uses. The site is also part of the city’s 2040 general plan, which designates the location as a commercial neighborhood.

The property is located in an area with very desirable demographics. According to the property’s offering document, within five miles of the property there is a population of in excess of 613,000 people and an average household income over $151,000 with a daytime population of roughly 567,000.

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