San Jose Property where Village was Proposed is Scooped up by Two Real Estate Firms
Originally proposed to be a mixed-use neighborhood next to a busy light rail line, a large north San Jose site was just bought by real estate investors with ties to the Bay Area.
As reported recently in The Mercury News, the real estate investors paid $28.9 million for a building and parking lot at 3011 N. First St. in San Jose, according to documents filed on June 4 with the Santa Clara County Recorder’s Office.
According to county and state public records, the buyer was an affiliate headed up by the real estate investment and development firms of Blue Vista Capital Management from Chicago and San Francisco-based Cannae Partners.
Sand Hill Property Co., which is based in Palo Alto, was the seller as indicated by the county records. In 2015, Sand Hill affiliate SHP-CUTE paid $31 million for the 9.3-acre property.
Just three years later, Sand Hill Property put out preliminary plans for the development on the site of a big mixed-use village of offices, homes and retail spaces.
However, city records didn’t disclose how far the proposal has proceeded through the San Jose planning process.
Sand Hill Property had requested a preliminary city review of a proposal for 505,000 square feet of offices, 800 residential units and 13,000 square feet of retail.
It is possible that the newly-completed property purchase was then undertaken on behalf of major buyers that invest in real estate globally.
Blue Vista Capital typically partners on investments with major players including “pension funds, endowments, foundations, insurance companies, wealth managers and corporations,” according to the company’s website.
Cannae Partners prefers to keep its focus on properties found in the Bay Area.
The only thing that is not known is whether some type of redevelopment of the site would be considered by the new owners.
The location is a prime spot in San Jose at the corner of North First Street and Orchard Parkway next to the Orchard Station, which is one of the busiest stretches of the region’s light rail system.
Currently, Intermolecular, an electronics manufacturing company, leases a 146,200-square-foot office and research building on the property.
Intermolecular’s lease still has several years left, so the property could continue to be a producer of rental income for the new owners.
Public documents reveal that the buyers agreed to take on a $21 million mortgage as part of the just-completed property purchase.
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