By Jon Peterson
As Silicon Valley’s commercial real estate market looks to transform two quarters of positive growth into a strong trend for the industry, some opportunities for redevelopment have started to emerge. One such opportunity is located on two sites in San Jose that just went up for sale. They are located at 2812 and 2850 Stevens Creek Boulevard, and the asking price on the two sites combined is $25 million, according to reporting by the San Jose Mercury News.
The listing agent on the sale is David Taxin, a partner with brokerage Mecham/Oppenheimer based in San Jose, and he sees a few possible outcomes in the transaction. “The sale of the two sites really has a lot of potential outcomes. One buyer could acquire both sites and go through new entitlements to create one very large office complex. There is also a scenario where each site would have a different buyer with a different kind of real estate developed,” he said.
If the two sites were combined, they could end up with an office development somewhere in the range of 300,000 to 400,000 square feet. The kind of tenants that might be interested in this size of an opportunity and amount of space could be technology tenants or even medical office users. Together, the two sites amount to 1.3 acres of land.
The site located at 2850 Stevens Creek is owned by an affiliate that is led by Adeel Mahmood, a principal executive with Villa Developers & Investment. This site has been approved for new hotel development of around 170 rooms over 11 stories. It is presently occupied by a gas station. On its own, the pricing guidance for this site is around $12.8 million.
The lot next to it, located at 2812 Stevens Creek, is currently owned by an affiliate headed by the Sal Cala family, a real estate investment group. This parcel is producing some income since it has an auto repair shop and a small retail strip center in the back. This revenue could provide the new owner some time to go through entitlements if it decided to do so.
The two sites are in an area known for major retail operations. They are located across the street from the Westfield Valley Fair mall and down the street from Santana Row, two premier retail and mixed-use anchor developments in this part of San Jose. Proximity to these locations could attract a new major retail user to take advantage of all of the foot traffic the two malls receive on a regular basis.