By Meghan Hall
Sand Hill Property Company, the investment and development in charge of spearheading the repositioning of Cupertino’s Vallco Mall, has submitted plans to revamp another shopping center in San Jose: the El Paseo de Saratoga Mall. Sand Hill Property Company has submitted two sets of preliminary plans for the site, both of which include a mix of residential, office and retail.
Plans also include a small property across the street, located at 1777 Saratoga Ave. The first set of plans propose 720 units of housing and 25,000 square feet of retail at the El Paseo de Saratoga Mall site, while an additional 130 residential units and 120,000 square feet of office would be developed on the lot across the way. 108,000 square feet, about a third of the current mall, would be demolished to make way for new development.
The second scenario would a lot for the same amount of development on the small parcel as the first. However, the El Paseo de Saratoga Mall portion would be redeveloped with 400,000 square feet of office, 10,000 square feet of retail and 580 residential units. The project would involve eliminating 97,000 square feet of space from the current mall.
In January of this year, Sand Hill purchased the roughly 300,000 square foot mall from Newport, Calif.-based Terramar Retail Centers for $146.6 million. At the time of the transaction, Sand Hill also agreed to assume an existing mortgage on the property from Metropolitan Life Insurance that had a principal balance of $58 million.
As of January, the assessed value of the property was $120.5 million.
The shopping center is located off of Saratoga Ave. and West Campbell Ave. in South San Jose and is easily accessible via the Lawrence Expressway. According to previous reporting done by The Registry, an average of around 40,000 cars pass by the mall daily. The mall is anchored with several major tenants such as AMC Saratoga, REI, Peet’s Coffee and Jamba Juice.
The plans were submitted at a time when not just Sand Hill, but many other development companies, are looking to repurpose and reposition retail centers throughout the San Francisco Bay Area. Fledgling malls are often located in highly trafficked neighborhoods and provide ample land for developers to create mixed-use developments to balance out the already-present retail. Sand Hill Property Company is currently working to redevelop Cupertino’s Vallco mall with more than 2,400 units, half of which would be affordable, 1.8 million square feet of office space and 400,000 square feet of retail.
The Westgate Shopping Center, just adjacent to the El Paseo de Saratoga on Prospect Rd., will also receive a facelift. Property owner Costa Mesa, Calif.-based Donahue Schriber Realty Group plans to add an additional 16,450 square feet of space to a portion of the property previously occupied by Orchard Supply Hardware.
In October 2018, LBG Real Estate Companies LLC announced its plans to put $1 billion into Richmond’s distressed Shops at Hilltop. The 77-acres, when redeveloped, could include up to 9,600 residential units and 16.7 million square feet of retail, residential, hotel and medical uses. The first phase of redevelopment, which includes revamping the current property while future phases are underway, is expected to cost about $150 million.