3 November 2015

Office, condo towers envisioned for downtown San Jose across from City Hall

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A 1.4-acre parcel across the street from San Jose City Hall would sprout two towers — one office, the other condo — under plans being considered by the property’s new owner, a Chinese-backed development group that expects the project to be just the start of its work in Silicon Valley.

“They’ve built absolutely exquisite mixed-use projects in Beijing, and now they want to bring that level of quality and experience to San Jose,” said architect Rob Steinberg of the eponymous design firm, which is working with the company. “Their hope is they will become part of our community, and that this is the first of many that they’ll be able to do here.”

SJSC Properties LLC, the U.S. arm of Beijing Damei Investment Co. Ltd., bought the parcel from the city’s former redevelopment agency earlier this year, paying $12.8 million. But it hasn’t said much about its vision for the site.

The company turned in a preliminary development application last month, and while the plans could change, the general outlines are starting to come into focus.

The concept includes a 28-story, 350-unit condo tower on the western side, with a 20-story, 350,000-square-foot office building flanking the eastern edge of the parcel. Both would rise up to 295 feet from a shared podium parking garage, making them among the city’s tallest buildings. About 20,000 square feet retail would help “activate” Santa Clara Street and Fourth Street, Steinberg said.

The proposal is notable because it signifies a couple of themes playing out in downtown San Jose’s real estate scene: Interest is growing from Chinese investors, with China-affiliated companies backing two other high-rise projects. And office development, after years in deep freeze, is finally coming back to life.

In the case of the new project, dubbed SJSC Towers, the company had been looking around the region for years for a signature project, Steinberg said. The site across from City Hall — where a new satellite of the U.S. Patent and Trademark Office recently opened, and steps from a planned Bay Area Rapid Transit station — fit the bill.

“Our hope is just as San Pedro Square Market started to make a district within the city, this will help to help make a district here,” Steinberg said. “What’s going to be exciting is the city is going to develop these multiple points of interest, and I’m thinking this is going to be one.”

The mix of uses is unusual for a single site like this in the U.S., but it’s common overseas, Steinberg said. “In the U.S., most development companies are more focused on one or another — office or residential,” he said. “In China, most things are mixed use.”

SJSC executives knew they wanted to do a significant residential project, but they also envisioned a sizable office component. That grew into the two-tower concept after analyzing the market needs. “They felt there haven’t been office buildings built in the downtown in a while,” Steinberg said. “And we’re trying to develop an office product that’s a little different from what’s available now.”

The office vision includes an “offset core” design, which is more difficult to build but results in more efficient floors to support tech-friendly collaborative interiors. The plans also call for 15-foot-tall ceilings with exposed concrete slabs. “And we’re looking at each floor having the capability of interstitial stairs, so you can have the flexibility of combining floors,” Steinberg said.

The residential units in the other tower will be for-sale, not rental, and will come with loads of high-end amenities on a rooftop deck. The units will range from 900 to 1,000 square feet, not counting seven 1,900-square-foot penthouses.

SJSC’s goal is to have the office building leased before construction, but it’s possible that the project could be built on a speculative basis, or without a tenant signed. Both towers would be constructed at the same time. A price for the project was not disclosed.

Steinberg is still working on the building’s architecture, but expects to have the first pass done and presented for the city’s architecture review in a couple of weeks.

“My expectation (for the architecture) is, I want to raise the bar, and they do too,” Steinberg said. The two towers will share some of the same DNA, but they won’t be carbon copies. And they will respect their civic neighbor — the 2005-built City Hall — across the street.

“The composition of both buildings on the skyline has to be beautiful, and then each one has to stand on its own,” Steinberg said.

In addition to this project, Silvery Towers, with more than 643 units, is backed by the U.S. arm of a Chinese firm. That project is currently under construction, with crews excavating an enormous subterranean garage. And Museum Place, a proposed redevelopment of the Tech Museum’s aging exhibit space into a sleek office/condo/hotel tower, is also backed by Chinese investors.

Steinberg, who has a long history of work in China, said he doesn’t foresee a slowdown in Chinese investment in the U.S. despite news stories about slowing growth in the country. The Bay Area in particular is seen as one of the most desirable markets in which to invest. In the case of SJSC and Beijing Damei, the downtown towers are likely just the start of something bigger, he said. The company is building out a local team for the long haul.

“There’s so much fascination with Silicon Valley,” he said. “I believe that the investment from China will continue and increase significantly.”

Original article can be found here.

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