Interest in San Jose properties continues unabated. An entity that recently purchased the Bank of Italy building in downtown San Jose late last year, is continuing to accumulate parcels around that project. In a deal that closed earlier this week, an entity associated with Gary Dillabough, a managing partner with Alameda-based Navitas Capital and formerly with Menlo Park-based Westly Group, acquired a 1.25-acre parcel for $25.7 million, according to public documents.
The lot, which takes up almost a third of the city block between E. Santa Clara Street and E. San Fernando Street is known as the Fountain Alley parking lot and is located at 35 S. 2nd Street. It is on the same block at the 90-year old, 122,000 square foot Bank of Italy office building, located at 12 South 1st Street, which Dillabough purchased in a joint venture with an entity associated with WeWork. That purchase was for $30.6 million for the building and parking immediately next to the structure.
It is not clear at this time what the new ownership plans to do with the assets, and some have speculated that parking may remain the best use for this lot, since it is scarce in this part of the downtown core.
When the earlier purchase was made, the new owners stated that they are interested in preserving the character of the property while making it environmentally friendly. If this remains their commitment, they will likely have to invest to modernize the structure in order to bring new tenants and add value to the property.
The Bank of Italy building is designated San Jose Historical Landmark (the first structure ever) and is also listed in the National Register of Historic Places—Historic District. Presently, it is used for office space for various law firms and tax services among others, in addition to a pawn shop and a night club, and formerly an AIDS advocacy group.