SAN JOSE—An 8.22-acre site at 374-384 West Santa Clara St. has been acquired for $58.5 million, according to Bentall Kennedy Limited Partnership. Multi-Employer Property Trust (MEPT) and its real estate adviser, Bentall Kennedy, together with Trammell Crow Company, were partners on the land acquisition. The planned development projects on the site are structured on a joint venture basis, continuing a longstanding partnership that includes more than 85 projects of more than 25 million square feet and $2.4 billion in value.
“Diridon Station is the Silicon Valley terminus for Caltrain, ACE trains, VTA light rail, Amtrak Capital Corridor and a planned BART station. The master plan for Diridon Station is intended to create a transit hub similar to San Francisco's Transbay District. This project will significantly contribute to the transformation of Diridon Station into a thriving live/work/play environment,” said Ashley Powell, senior vice president and western region head of transactions for Bentall Kennedy.
The site is adjacent to the Diridon Station master plan that is zoned for the construction of two 10-story office buildings and a nine-story multi-family building. The station is the first Northern California stop for potential high-speed rail service connecting Los Angeles to the Bay Area.
Powell tells Globest.com: "The team anticipates breaking ground on Phase 1 consisting of 373,000 square feet of-tech oriented office, 325 apartment units and roughly 20,000 square feet of retail in the summer of 2016 with offices delivered by Q1 2018. Phase 1 and 2 office buildings can be connected to create a highly efficient almost 80,000-square-foot floorplate. The buildings are being designed for creative tenants with floor to ceiling glass and 15-foot floor-to-floor heights."
The Diridon Station site is in close proximity to park land and other regional recreational amenities attractive to both commercial and residential tenants. It is across the street from the SAP Center and offers food, entertainment and other service amenities within walking distance both west of the site and east in San Jose's downtown.
“Diridon Station provides an urban growth opportunity in the Downtown San Jose submarket, a prime location in Silicon Valley, one of the most innovation-focused markets in the United States, and it offers a high-rise development ideally suited to the Fund's investment strategy,” said David Antonelli, executive vice president and MEPT portfolio manager at Bentall Kennedy.
“This major investment will catalyze the Diridon Station master plan area adopted by the city of San Jose last year, bringing a significant number of new, high quality jobs to the area,” said Don Little, senior vice president of Trammell Crow Company's Northern California business unit. “New retail and amenities will further activate the entertainment district around the SAP Arena. This project represents smart growth around the most robust transit hub in the Silicon Valley.”
"With 10 million square feet of active office tenants in the market and strong demand for apartments, MEPT's plans for higher-density development should attract tenants in Silicon Valley,” says Powell.
As previously reported, plans were approved last year.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
