MILPITAS, CA—The North San Jose/Milpitas submarket is consistently among the most stable residential markets in the country. According to MPF Research, the submarket reported 95% or greater occupancy since 2009, with second quarter 2015 occupancy at nearly 97%. With this type of demand history and transit plans in the works, development of a seven-story, 371-unit, class-A multifamily apartment project is now underway.
The District is a fully entitled, 5.2-acre site located at 1315 McCandless Dr. that will be developed by Lyon Communities. It will include 45,000 square feet of ground floor retail. PCCP LLC provided a $44 million mezzanine loan which has enabled Lyon to begin construction with anticipated completion in late 2017.
The District is within the Milpitas Transit Area Specific Plan (TASP) which is designed to redevelop underutilized warehouse and flex office buildings into transit-oriented, mixed-use developments. The impetus for TASP is the extension of BART into San Jose and the development of a Milpitas BART station just a few blocks away that will also be completed in 2017.
The District is located at the corner of Great Mall Parkway and McCandless Drive, and is in proximity to Silicon Valley's largest employers including Samsung, eBay, Sandisk, Cisco Systems, Intel and KLA Tencor. It is also less than one mile from Interstate 880, 680 and 237 freeway ramps, providing direct access to San Francisco and San Jose, and is across the street from Simon Property Group's 1.1 million-square-foot Great Mall.
Ron Bonneau, senior vice president with PCCP, tells Globest.com: "The District has all the elements of being a highly successful project including an experienced developer, thriving Bay Area location in the heart of Silicon Valley, and a supply-constrained market with demand that far outweighs supply. PCCP's is looking forward to seeing the progress and ultimately a fully occupied, class-A luxury product near the newly built-out mass transit infrastructure."
Also slated for 2017 completion is a PCCP-funded 185-unit apartment complex with 28,641 square feet of ground floor retail space on 6.24 acres of land in Fremont, CA. The senior construction loan was provided to a joint venture between BHV CenterStreet Properties and JD Capital for the development of Artist Walk, an infill mixed-use project within the Centerville District. Construction on the project has commenced.
PCCP also provided a senior loan to ProspectHill Group and SKS Partners for the acquisition and complete renovation of a single-story office/R&D building totaling 65,188 square feet in the north submarket of San Jose. Located along the North First Street Corridor at 3901 North First St., the property has been vacant since late 2012 when SVTC Technologies ceased operations. The seller was a private investor.
As previously reported, PCCP recently funded a retail center in San Jose.
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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.
