By Meghan Hall
Santana Row and the Westfield Valley Fair Mall, along with the Winchester Mystery House have been catalysts for development along Winchester Boulevard in a development cycle that has come to heavily favor high-density, walkable, mixed-use development. San Jose’s Khan’s Restaurant, located just across the street from Santana Row at 335 S. Winchester Blvd., could be demolished in favor of a higher-density office complex, San Jose planning documents show. In the fall of 2018, an application was submitted by property owner SPE Construction to construct a five-story commercial building with four levels of office space over ground floor commercial retail totaling 94,996 square feet.
The Public Works Department completed its review of environmental documents at the end of May of this year, although documents do not indicate whether or not the project has been approved. Khanh’s Restaurant, the business that currently occupies the site, has been in operation since 1981, according to its website.
San Jose has a more than a dozen major office developments in the pipeline, according to its most recent Five-Year Economic Forecast for 2020-2024. Classified as projects greater than 75,000 square feet, there are currently 15 major office projects pending City approval throughout San Jose, totaling more than 7.5 million square feet of space. The City of San Jose predicts that commercial development and projects such as the 335 S. Winchester Blvd. project will continue to drive San Jose forward, as the valuation of new commercial construction during the 2017-2018 fiscal year totaled nearly $401 million.
According to Newmark Knight Frank’s Second Quarter Silicon Valley Office Market Report, San Jose led all other submarkets in absorption during the second quarter. The report states that San Jose had the strongest quarter for an individual submarket in more than 10 years, thanks to 767,966 square feet of positive net absorption. The bulk of that came from North San Jose, where Google took more than one million square feet between one lease and one owner/user purchase.
West San Jose has been growing steadily alongside both downtown and the north of the City, as investors are keen to capitalize on growth spurred on by the tech industry. The portion of the City has just over four million square feet of office inventory at the end of Q2 of 2019 and an availability rate of 5.39 percent, one of the healthiest in San Jose. Both the City — and Newmark Knight Frank — indicate that the economic health and viability of San Jose will continue steadily in the coming years.
SPE Construction could not immediately be reached for comment.