Bank of Italy building finds a buyer
Investors pay nearly $34M for iconic 90-year-old tower
SAN JOSE >> The Bank of Italy office building, deemed by experts to be downtown San Jose’s most iconic tower, has been bought by investors based in Menlo Park and Manhattan, according to public records that indicate WeWork has taken an ownership interest in the high rise.
Through several transactions in December and October, two investment groups that are working together paid $33.8 million
for the historic 90-year-old office tower, along with an adjacent parking lot and a building that contains Lido’s nightclub.
“We are a local group of investors who care deeply about an iconic building that was in need of repair,” Gary Dillabough, a realty investor and venture capitalist who is leading the efforts to revive the downtown San Jose icon, told this news organization Monday. “Our capital partner is back east.”
Dillabough, who is a managing partner for two investment firms, Alamedabased Navitas Capital and Menlo Park-based Westly Group, declined to name the capital partner.
Located at 12 S. First St. near the corner of East Santa Clara Street, the building consists of 122,000 square feet of space, according to a decade-old real estate listing.
Dillabough said he and his group hope to show that older buildings can become more than just magnets for an upswing in economic activity by drawing job-creating office tenants. He believes they can also become environmentally friendly.
Dillabough said he has completed renovations of three Sunnyvale buildings that are now deemed zero net energy buildings, which means the energy they consume is roughly equal to the renewable energy they produce on site.
“We are committed to helping restore older buildings in the Silicon Valley,” Dillabough said. “We intend to demonstrate that older buildings have the ability to become extremely energy efficient.”
The property tax statements and several of the deeds that accomplished the San Jose property acquisitions, which were completed on Dec. 15, are being mailed to a Manhattan address that is the corporate headquarters of WeWork. WeWork provides shared work spaces for an array of companies, including tech firms.
Gwendolyn Rocco, a spokeswoman for WeWork, declined comment on Monday.
“This is absolutely remarkable that the buyers have been able to put together this deal,” Mark Ritchie, president of San Jose-based Ritchie Commercial, a realty brokerage, said Monday. “The Bank of Italy building is the icon of downtown San Jose.”
The buyers of the Bank of Italy building and its nearby parcels are operating as realty ventures based in Menlo Park and New York City. Prior to this year’s transactions, the historic tower had been owned in a complicated condominium arrangement, so several sellers were involved.
The 14-story building, constructed 90 years ago, was the one-time site of a branch of the Bank of Italy, a bank founded by Amadeo Peter Giannini that was a forerunner of Bank of America.
“This building has great bones and it is prime example of buildings constructed during the 1920s, one of the finest eras of American architecture,” Ritchie said.
Ever since Google and its development ally Trammell Crow began to collect properties in the Diridon Station and SAP Center area, potentially for a vast Google transit village, a growing number of investors seem eager to jump into downtown San Jose.
“The Bank of Italy building is just part of what made downtown San Jose interesting in days past, and it’s just as much of an icon as the Fairmont Hotel and the Adobe headquarters, and the downtown icon that Google will be in the future,” said Bob Staedler, principal executive with San Jose-based Silicon Valley Synergy, a land-use and planning consultant.