By Meghan Hall
Over the course of 2018, San Jose was a hotbed of sales and development activity, and that trend has continued into the new year. Developer Sand Hill Property purchased the roughly 300,000 square foot El Paseo de Saratoga Mall from Newport Beach, Calif.-based Terramar Retail Centers for $146.6 million at the beginning of January.
The transaction was first reported by the San Jose Mercury News.
The shopping center is located off of Saratoga Ave. and West Campbell Ave. in a more residential area of South San Jose. It is easily accessible via the Lawrence Expressway, of which around 40,000 cars pass by the mall daily, according to Terramar Retail Centers’ website. Just across the street is the Westgate Shopping Center with major tenants such as Target, Walmart, Nordstrom and Trader Joe’s. El Paseo de Saratoga itself is anchored by AMC Saratoga and other major eateries and retailers such as REI, Peet’s Coffee and Jamba Juice. Incoming retailers include Qwench Juice Bar and TruFusion, a fitness center with yoga and Pilates.
The assessed value for the center was $120.5 million, below the sales price and an indication of the success of the center.
“It’s a safe, long-term investment,” said David Taxin, a principal executive with Meacham Oppenheimer said to the Mercury News. Sand Hill Property has agreed to assume an existing mortgage on the property from Metropolitan Life Insurance that had a principal balance of $58 million at the end of 2018, according to the report.
The transaction comes at a time where malls are diversifying their offerings and shifting to mixed-use developments in order to improve their viability. Sand Hill Property will likely conduct some improvements to the property, but the extent of those are yet unknown. The development company is headed by Peter Pau, who has proposed to turn the defunct Vallco Mall in Cupertino into a massive mixed-use development that could have up to 2,400 homes, 1.8 million square feet of offices, a 30-acre rooftop park and 400,000 square feet of retail space. The Cupertino City Council approved the plans for the 58-acre site in September 2018.