Santana Row gains three more office tenants

One Santana West across the street from the famous Row has three new tenants and a brand new cafe. Calix is a cloud and managed services company leasing 22,990 SQFT on the 4th floor. They are moving from North San Jose in August. Better Help is taking 10,361 SQFT on the third floor while Pivot Interiors will take 15,000 SQFT on the third floor.

Those three leases will bring the 375,000 SQFT building to 70% occupancy, which is impressive given the current state of the market.

As a final bonus, a brand new cafe will be added to the first floor of the building in Spring. It might not be a full expansion of Santana Row, but I hope the cafe will live up to same standards set across the street.

Source: SVBJ

Downtown San Jose office building may convert to housing

We're in a precarious situation right now with office space. Many employees simply do not want to return to the office and companies are looking to downsize their footprint because of it. At the same time, population is not growing quickly and we do not have a rush of companies across the world looking to relocate staff to the most expensive region of the United States. What are we to do with all the empty space?

A nine-story office tower at 152 North Third Street is considering a conversion to 133 residential units. This is a very smart move that would reduce the amount of empty office space and replace it with much needed housing.

As a bonus, the building was constructed in 1985 and a conversion would bring it up to modern standards. It would also keep the "Eagles Hall" facade that was built in 1909 in the photo below.

If it goes through, the project would also include a lounge, game room, two music studios, a gym, yoga studio, cinema room, coworking space, two meeting rooms, a cafe, kitchen, club room, and amenity terrace.

Hopefully they keep Freshly Baked Eatery on the ground floor, which is the best sandwich shop in Downtown San Jose.

Source: The Mercury News

Goodwill buys San Jose office building for $17 million

Goodwill of Silicon Valley has just purchased an empty building at 1600 Technology Drive in North San Jose near the airport. The shiny eight-story building is destined to become Goodwill's new headquarters.

They will also use the facilities for job training and employment opportunity services, including no-cost skills training to benefit the local community.

Goodwill got the deal of the century on the building. It was previously valued at $92.4 million in January of 2024. So they paid 81.6% less than the assessed value for the 198,000 SQFT building.

The purchase was made possible by a $10 million donation from MacKenzie Scott (Jeff Bezos' ex-wife). 

Goodwill plans to immediately start relocating administrative and operations staff to the new building. Any unutilized space will be shared with other local nonprofits.

Source: The Mercury News

New coworking space opening in Downtown San Jose

Pacific Workplaces is a flexible workspace solution for individuals and teams. It's a modern take on coworking. They are doing a grand opening for their newest space in Downtown San Jose on February 19th from 3-5pm.

The party will have food, music, and a raffle for a $1,000 Vari.com shopping spree. The new digs are at 84 W. Santa Clara Street, 7th Floor. It's a great central location in Downtown San Jose, walking distance to everything.

Source: Pacific Workplaces

VTA moving workers into one of Downtown San Jose's nicest office buildings

The shiny blue tower at 488 South Almaden (forever in my mind as the Sobrato Tower) has a new owner. The Santa Clara Valley Transportation Agency (VTA) has chosen it as it's new home. They had previously been looking for up to 500,000 SQFT to lease with an option to buy.

The 17-story tower has 379,000 SQFT and stunning views of Downtown San Jose. I attended an event on the penthouse floor many years ago and at the time it was by far the nicest office building I had ever been to.

The VTA has taken advantage of a challenging office market with over 3 million SQFT of office space up for grabs in Downtown San Jose. This purchase will certainly make a dent in office vacancies when VTA workers move in around 2026.

The new office space will be just minutes away from two VTA Lightrail Stations and several bus routes.

Source: SiliconValley.com

San Jose approves tax breaks to help fill empty office space

Downtown San Jose like most places is struggling to fill up empty office space. The San Jose City Council voted unanimously to approve a new policy to help entice companies to lease up vacant space.

Any business with at least 2,500 SQFT that signs up for a four year lease or longer will be exempt from paying city business taxes and fees for at least five parking permits for two years. It's a step towards helping bring more people to Downtown San Jose and filling up about 3 million SQFT of available office space.

There have been some positive news in Downtown's commercial real estate scene. More on that tomorrow.

Source: San Jose Spotlight

Cisco is consolidating San Jose offices at Santana Row

After acquiring Splunk in 2024, Cisco is now working on consolidating office space. While the company has 30 buildings across its North San Jose campus, you could argue that their flagship building is sitting at the end of Santana Row. 

Cisco is planning to close four buildings at 3750 Zanker Road and 260, 300, and 350 East Tasman Drive and moving those lucky employees to the former Splunk headquarters at the Row in mid October.

The space--which I'm assuming was already pretty nice to begin with--is also undergoing a renovation. The best way to encourage people to head back into the office is to make the office an amenity. The location will certainly help here.

Source: SVBJ

Couchbase takes the ground-floor at Santana West

Santana West has just leased another tenant across from Santana Row. Couchbase has leased 23,680 SQFT on the ground floor and plans to move in Q1 2025. There will also be a fitness center, golf simulator, and cafe on that floor.

Couchbase will join PWC and Acrisure as major tenants of the building, which is an easy walk to Silicon Valley's top shopping and dining destinations.

Source: SVBJ

X (Twitter) is relocating Bay Area staff to San Jose

After 18 years, X (formerly Twitter) is leaving San Francisco and is relocating staff to San Jose and Palo Alto. While the headquarters is officially moving to Austin, they are still keeping operations in the Bay Area and could have stayed in SF. However, the main reasons for the move are crime, homelessness, rampant drug use outside the office, and a city tax structure that makes it unsustainable for financial payments companies to exist (X is moving into payments soon).

I cannot find where the existing X offices are today in San Jose (UPDATE: it's Santana Row and I blogged about it five years ago 🤦‍♂️) ...

...but Downtown San Jose would be the perfect location for those coming from SF. Not only is Caltrain a valid option, but the ease of access to to restaurants and things to do outside the office rivals their old location with far fewer of the issues that plagued X employees.

Below is the email to X employees from Linda Yaccarino, X CEO.

Source: Fortune

Rendering of a 21-story office building at 50 W. Santa Clara street in Downtown San Jose

The render below is a massing diagram for a proposed 21-story building called "The Clayton." It comes in at almost a quarter million SQFT (242,000 SQFT to be exact) and is nestled in Lightston Alley and Santa Clara Street. Currently there is a two-story building at this site with City Bagels, HotWorx, and Fuji Restaurant on the ground floor.

Today might not be the best time for new office tower developments, but we will have to build more office space again eventually. The proposed project will be sitting on top of a future BART station and the development timeline would actually be tied to BART being completed. Unfortunately that means 2037. Still having a new high-rise right on Santa Clara Street that is not residential is an exciting prospect to look forward to.

For companies looking for office space today, there are many opportunities including the shiny new 200 Park building by Plaza de Cesar Chavez that is roughly one million SQFT. 

Source: San Jose Spotlight

Microsoft planning massive data center in North San Jose

Microsoft want to build two five-story data centers near the corner of Component Drive and Orchard Parkway in North San Jose. Microsoft originally paid $78.7 million for the land in 2021 and has been sitting on it ever since. With the rise of ChatGPT (which Microsoft has a big stake in), the need for data centers will skyrocket.

Part of the project would also include a water storage tank, pump building with chemical treatments for that water storage, and a new PG&E electrical substation.

The 30+ acre data center project would be right next door to a mixed-use village in North San Jose consisting of offices, hotels, and retail. That project, which is being led by LBA Realty, could clock in at 1.28 million SQFT. Today I also noticed that Apple is leasing some buildings in the area right before you turn onto Highway 87. It could be an interesting area in a few years.

Source: East Bay Times

Six-story office building to be replaced with townhomes

Over 100 homes could replace an office building in North San Jose, but there is a twist. The proposed project at 2107 North First St. would include 105 townhomes right next to the headquarters of PayPal and several other tech companies in the golden triangle of North San Jose. It has easy access to VTA Light Rail and in general is in a prime location.

Ready for the twist? In order to make room for those townhomes, a perfectly good 6-story office building would be torn down. While I understand the need to convert more office space to housing in order to balance supply and demand of each real estate use, this seems like a step backwards. Silicon Valley townhomes are typically three stories and in some rare cases four stories. 

If they are tearing down a whole office building, why not go with high-density housing? This site could easily support high-rises taller than Downtown San Jose. Townhomes do not seem like the best use for this land.

Source: The Mercury News

PwC coming to Santana West

PwC has leased 141,000 SQFT of office space at One Santana West, right across the street from Santana Row. The decision was led by the modernity, efficiency, and amenities the office offered. PwC plans to occupy the space in early 2026.

That now makes 3.5 floors leased in the building, with 4.5 floors and 198,000 SQFT to go. Acrisure is the only other tenant in the building.

Source: SVBJ

Has Google forgotten about Downtown San Jose?

The short answer is... no.

If Google had no plans to execute on their vision for Downtown West near Diridon, they would have immediately halted all work on their real estate holdings in San Jose. Instead, they are still making small updates and preparations. For example, a former Orchard Supply Hardware at 720 West San Carlos is being bulldozed over the next couple months to make way for future construction.

The eventual goal is to build 7.3 million SQFT of office space, 4,000 residential units, 500k SQFT of retail, 300 hotel rooms, and 15 acres of open space in Downtown West. Google wants to employ as many as 20,000 workers in San Jose.

Source: The Mercury News

Santana Row expansion (Santana West) scores their first lease -- Acrisure

It's a challenging market for office space, but it always seems to be sunny at Santana Row. A financial tech company called Acrisure LLC is leasing 29,000 SQFT in the shiny new Santana West project across the street from the famous Row. Acrisure is planning on having 150 employees work out of that office, taking up most of the 4th floor of the building.

So far, only one building has been constructed as part of for Santana West. The plan is for there to be two more midrises with the final project totaling a million SQFT of office space. However, given the state of the office and residential markets, perhaps it wouldn't be a bad idea to pivot and use the remaining space as a true mixed-use extension to Santana Row with retail and residential.

Source: SVBJ

Downtown San Jose office tower converting to housing

Urban Catalyst is building two high rises near city hall, one is a 26-story high-rise with 389 residences and the other was supposed to be a 20-story office building called Icon with 525,000 SQFT of office space. Now given market conditions, it looks like the office building is going to pivot into more housing.

The converted project would have 650 multifamily units after getting city approval. There is a significant need for housing and a lot of vacant office space right now in Downtown San Jose, so this sounds like a wise shift.

Source: The Merc

Google's Downtown San Jose project still has signs of life

While it's not the promised mixed-use megacampus many were excited about, Google is still planning to be active in the Downtown San Jose area. They are hosting Creekside Socials at various locations within the footprint of their proposed project near the Shark Tank and Diridon Station. These events are designed to celebrate the local culinary and creative community. There will be live music, food trucks, interactive art, a bike valet, children's programming, and a small maker's faire. 

The first Creekside Social will be on September 9th from 11am-3pm at 20 Barack Obama Boulevard across from the SAP Center.

Google is also preserving the historic San Jose Water Company building and is working with local artist to enhance the "Downtown West" neighborhood they will hopefully be anchoring in the coming years and/or decades.

Source: The Merc

Alviso/North San Jose entertainment district is now a data center

Next to the Topgolf in Alviso was a grand plan for an entertainment district containing shops, restaurants, and two hotels. Five years later, the area around Topgolf is still barren (although Topgolf is doing very well on its own). 

Now, the owners of the land are coming back to the city with a very different proposal that is likely to be a lot less exciting for North San Jose residents... a giant data center. I'm digging the exterior design with a living wall for the 172,500 SQFT two-story building and it's neighboring 174,400 SQFT three-story power center--but it's still a server farm. 

There is still hope for a 15,000 SQFT retail space, which could house a few restaurants. However, that is nothing compared the the multi-million SQFT projects Santa Clara is planning down the street. In a few years there will be tons of new apartments, office buildings, restaurants, shopping, and at least one new hotel across from Levi's stadium. Not to mention all of Great America will likely be turned into some mixed used mega-property like Santana Row over the next 10-15 years. 

Something is better than nothing from a city tax dollar perspective, but we should question whether this is the best use for this land. Once it's a data center, I don't think it will be convertible to anything else.

Source: The Merc

San Jose office building may be converted to residential or hotel

A 10-story, 113-year-old office building at 2 West Santa Clara St. might be converted to become either a residential building or a hotel.

Like many urban areas today, Downtown San Jose has a very high office vacancy rate. In Q2 it was 26.6%, partially because the massive 200 Park office tower was completed, adding greatly to the amount of available office space in the area. Santa Clara is also at 26.1% and San Francisco has a whopping 31.6% office vacancy.

So it makes quite a bit of sense to take some of the older office buildings and convert them to other uses that have more demand. Some of the plans up for consideration for 2 West Santa Clara are 65 residences, a hotel with 147 rooms, or a 73-unit co-living space (e.g. The Grad). 

The building has a great location in central Downtown San Jose but is only 100,000 SQFT and has small floor plates that are not popular with tech companies these days. Since every office has windows already, it should a pretty easy conversion to residential or a hotel.

Source: SFGATE

A look inside Adobe's 4th Tower

Adobe was the first large tech company to be headquartered in Downtown San Jose. What started out as one tower eventually became an urban campus of three high-rises with some cool amenities like hidden a basketball court in the middle of them. Now there is a fourth Adobe tower to rule them all that is roughly the same size as the previous three combined. It also has a museum that is publicly accessible!

The Mercury News has a sneak peek inside the shiny new tower. From Highway 87 it's almost an optical illusion where it looks like a mid-rise building, but it's 18 stories and has 700,000 SQFT of office space with a bridge to connect it to the other three towers.

Inside, areas are color-coded based on function and local artists have left their mark on the new tower. There is a 50,000 SQFT cafe with cuisines from all over the world, both a perk and curse since Adobe employees should go out and also discover the amazing multi-cultural cuisines in Downtown San Jose.

I have a friend that works at Adobe so hopefully I'll go get my own photos at some point in the future. For now, check out the source link for a look inside one of San Jose's newest towers.

Source: The Merc