SAN JOSE – A large, mixed-use complex in west San Jose has driven property purchases that developers need to build a new office, residential and retail hub on Stevens Creek Boulevard.
A subsidiary affiliated with a joint venture between Miramar Capital Group and Machine Investment Group has purchased a select location on Stevens Creek Boulevard between Palace Drive and Kiely Boulevard, which, according to Santa Clara County’s public records, provides land for the Development of the project will provide.
Stevens Creek Promenade, as the development is called, is expected to change this part of western San Jose dramatically, adding modern offices that might be suitable for a tech company, as well as new homes, including affordable apartment blocks, and local retail stores.
Colliers International Institutional Capital Markets brokers Bob Gilley, Kevin Moul, Andy Zighelboim, Brad Idleman and Andrew Gibson represented the buyer and seller on the deal.
“The new owner group has the flexibility to drive a major redevelopment of the property,” said Colliers.
Santa Monica-based Miramar Capital Group and Machine Investment paid US $ 54.5 million for the property through subsidiary MPG Stevens Creek Owner.
“It’s exciting to see a group as well-capitalized as Miramar show a keen interest in this part of San Jose,” said Bob Staedler, chief executive of Silicon Valley Synergy, a land use consultancy. “Miramar’s commitment is a good sign that this project will continue to develop.”
Stevens Creek Promenade is expected to add at least 233,000 square feet of office space, up to 582 residential units, of which 88 would be affordable apartments, and approximately 10,000 square feet of retail space on the ground floor.
“This is an excellent project,” said Staedler.
A team of brokers from JLL Capital Markets, Alex Witt, Brandon Roth, and Spencer Bergthold, arranged a $ 33.3 million real estate loan on behalf of the buyer provided by California Bank and Trust.
“Despite the market uncertainty caused by Covid-19, California Bank and Trust financed the acquisition positively,” said Witt.
The seller was a subsidiary of Fortbay, a Los Gatos-based development company, which led the project through the city’s approval process. The Fortbay subsidiary paid $ 53 million in 2016 to maintain the development site.
The project also fits in with ongoing efforts to significantly improve the long corridor of Stevens Creek Boulevard and San Carlos Street through new development projects.
“Stevens Creek and San Carlos have a lot of development potential,” said Staedler. “It won’t happen overnight, but there is a lot of interest in this area.”
In the middle of the corridor are the Westfield Valley Fair and Santana Row, two famous malls that are commercial hubs in the area.
At the West End are digital hubs, the main user of which is the technology titan Apple.
Downtown San Jose is at the east end of this corridor, where search giant Google is planning a mixed-use neighborhood. The accomplished developer Jay Paul is building and planning new tech campuses. The developers Urban Community, Westbank and Urban Catalyst have a number of projects in mind and Adobe is building a new office tower.
All of this development interest means that a project like Stevens Creek Promenade could add significant activity in the corridor.
San Jose City officials approved the boardwalk project in 2019. The timeframe for construction to begin was not immediately known. Miramar Capital did not respond to a request for comment on the situation.
“This project fits in with the vision of living development where people can live, work and play in an urban village,” said San Jose Mayor Sam Liccardo and Vice Mayor Chappie Jones in a February 2019 memo of the Project. “It will also act as a catalyst for future growth along Stevens Creek Boulevard.”