By Meghan Hall
In the two years since its establishment, Urban Catalyst has been extraordinarily busy, pursing seven different development projects in concert with one another. While some developers have slowed their pace in recent months, the San Jose opportunity zone fund has not. At the beginning of July, Urban Catalyst announced it had submitted four site development permit applications within a week of one another—a feat during even normal, stable periods of economic growth and development. All of Urban Catalyst’s projects, including the four the Fund submitted for in July, are located in San Jose’s downtown core.
“It is significant that we submitted four site development permit applications in under two weeks,” said Erik Hayden, Urban Catalyst’s founder and CEO. “That’s something I haven’t done in my career…It just seems like there is a lot of synergy to it.”
The four projects moving ahead included Madera, a 157-unit multifamily development—Urban Catalyst’s first formally submitted project. The development will feature a mix of studios, two-, three-, four- and five-bedroom units.
The Mark, a 222-unit student housing project just adjacent to San Jose State University. Upon completion, The Mark will be able to accommodate around 850 students and will feature amenities such as student-oriented workspaces and outdoor recreation spaces. 4,000 square feet of ground floor retail is also planned for the project.
Delmas, a senior housing project with 117 assisted living and 50 memory care units. The project is the first senior living development to be constructed in downtown in more than 35 years. Also included for residents’ use will be a hair salon, theater, wellness center, library and outdoor courtyards. Groundbreaking for the project is anticipated to happen at the end of this year.
And, in a pivot from multifamily development, the Paseo: a transit-oriented, mixed-use complex. The project is the only one in Urban Catalyst’s portfolio that is not new, ground-up development. Instead, Urban Catalyst is revamping the pre-existing structure that once served as a movie theater into office space and ground-floor retail. The existing building’s 24-foot floor-to-ceiling heights will allow Urban Catalyst to incorporate unique features like mezzanines, floating conference rooms and catwalks. On the ground floor, Urban Catalyst will build out a full restaurant and bar.
From the get-go, Hayden and Urban Catalyst targeted downtown San Jose for its development projects, narrowing in on the submarket as the next natural landing pad for the region’s rapidly growing technology companies.
“Overall when I formed Urban Catalyst in 2018, I saw the macroeconomic trends in Silicon Valley really pointing towards downtown [San Jose] as a really great place to do ground-up development,” explained Hayden. “It’s the story of migration of the large technology tenants.”
As major technology companies have expanded—with Hayden stating that Google owns or leases 95 percent of Mountain View’s office inventory, and 50 percent of Sunnyvale’s office inventory belonging to a combination of Google and Facebook—they are also beginning to adopt what Hayden has termed a decentralized headquarters strategy. Effectively, large companies are looking for ways to occupy office space close to chunks of their workforces. As those workforces have been migrating to less expensive markets, tech tenants have followed.
In downtown San Jose, Adobe and Google have already moved forward with development plans to open nearby offices. In addition to strong economic and property fundamentals, Hayden added that the City of San Jose has moved forward with a number of measures to streamline the entitlement process. Over the years, the City has implemented a General Plan Designation and programmatic environmental impact report with specific allocations for office, residential, retail and hospitality uses.
As a result, all of Urban Catalyst’s projects are located in downtown San Jose, including an additional three developments not included in the Fund’s July submittals to the City of San Jose: The Fountain Alley Building, a commercial project with 67,000 square feet of office and 19,500 square feet of retail located to the Bank of Italy; Keystone @ Downtown West, a 175-key hotel; and The Icon, a mixed-use development located across from City Hall that will feature 314 residential units, 114,000 square feet of office and 6,000 square feet of ground floor retail.
“Overall, our strategy was to be here in downtown,” said Hayden. “…We’ve been doing business in San Jose for such a long time, that we’re very passionate about the revitalization of downtown. We want to make sure our projects are projects that the community wants and needs. That’s really the spirit of the opportunity zone fund program.”