Shopping spree near transit hub

Two investment groups have spent a total of $124Mon parcels near Diridon Station

SAN JOSE — Commercial real estate investors who are grabbing properties near the Diridon Station in downtown San Jose are expanding their footprint with a property purchase north of the SAP Center.

The newest purchase, a warehouse industrial building on Cinnabar Street, was sold for $51.5 million and will give developer Trammell Crow its first beachhead north of the SAP sports and entertainment complex.

“Diridon Station will be an extraordinary opportunity for our city,” San Jose Mayor Sam Liccardo said Thursday during a presentation to an Economic Summit at San Jose State. “This is an enormous development opportunity. Millions of square feet of office and retail space could be built

there.”

Trammell Crow and Rhyolite Enterprises have spent $124 million in a downtown shopping spree expected to revitalize that section of the city’s urban core.

Previously, the purchases were all located south of SAP Center. This new purchase means the area of interest near Diridon Station extends a full mile from the corner of North Montgomery and Cinnabar streets to a parcel near the intersection of South Montgomery Street, South Autumn Street and Park Avenue.

Millions of square feet of offices for tech giants on the scale of Google could be built in the areas where developers have begun to collect properties. Major tech companies in recent years have scouted for offices near transit hubs. The properties near Diridon Train Station fit that bill: The transit complex has Amtrak, Caltrain and lightrail access and will likely gain a BART stop.

“Diridon Station is like a Grand Central Station of the West,” said Bob Staedler, a principal executive with Silicon Valley Synergy, a land use consultancy. “It’s great to see all of this development activity fall into place.”

The property purchases are occurring in multiple areas that border three well-known downtown San Jose sites: SAP Center, an area once envisioned as a baseball stadium for the Oakland A’s, and a mammoth office and housing project proposed by a joint venture led by Trammell Crow, a big realty developer. The purchases began in December 2016 and con- tinued in January, February, March, April and May of this year.

Two commercial real estate investment groups, TC Agoge Associates and Rhyolite, have grabbed properties in this part of downtown San Jose. All the purchases have occurred along or next to Montgomery and Autumn streets.

“This shows that buyers are placing some big bets on the future of downtown San Jose,” said David Buchholz, a senior vice president with Colliers International, a commercial realty brokerage.

TC Agoge, a Trammell Crow affiliate, has spent $69 million to buy seven properties near the train station. The largest of the Trammell Crow deals was its purchase May 23 of a big industrial building at 567 Cinnabar St. near the corner of North Montgomery Street. Trammel Crow also has obtained options to buy at least three more parcels in the areas of interest, sellers said.

Rhyolite pulled off the biggest single transaction with its December purchase of an old Pacific Bell phone company building, paying $55 million.

The largest formal development proposal, from Trammell Crow, includes a centerpiece consisting of 1 million square feet of offices that could become a big campus for a tech firm. The project would rise on 8.3 acres that a Trammel Crow venture bought for $58.5 million in September 2015. The site also would include 325 apartment units.

“All of this activity would be a game changer for downtown San Jose,” Staedler said. “These and other projects will transform the down town and create a new vibe. Some very smart people are spending significant amounts of money downtown.”