‘Google effect’ behind sale of apartment complex close to downtown San Jose
Investors pick up 238-unit property near transit village
SAN JOSE » A big San Jose apartment complex a few blocks from downtown has been bought by West Coast investors for more than $100 million in a deal that experts say points to rising development and investment activity in the area.
Foundry Commons, located at 868 S 5th St., and bounded by South Fifth, East Virginia, South Sixth and Martha streets in San Jose, was bought by the investors Dec. 19, Santa Clara County public records show.
“When you see what’s going on in downtown San Jose with the activity from Google and others, that is going to raise the interest in all products, both in the downtown and nearby,” said Dave Sandlin, an executive vice president with Colliers Interna- tional, a commercial realty brokerage.
The investors, Tilden Properties, a Walnut Creek-based realty firm, and Bonney Watson, a mortuary company based in the Seattle suburb of SeaTac, paid $110.3 million for the 238-unit Foundry Commons apartments.
The investors also obtained a $68 million loan from Bellwether Enterprises to finance the purchase, according to the county documents. Principal executives for the two buyers couldn’t be reached for comment.
“You have all the activity in downtown San Jose, and with the crazy things going on in the stock market, this is a way for people to place their cash in a good investment,” said Bob Staedler, principal executive with Silicon Valley Synergy, a landuse and planning consultancy. “People are more confident they can get a return on their money.”
Mountain View- based Google has proposed a transit- oriented community of office buildings, homes, shops, restaurants and open spaces where up to 25,000 people could work, including 15,000 to 20,000 of the search giant’s employees, near the Diridon train station in downtown San Jose.
“Downtown San Jose is going to double in size, which is going to be a huge benefit for the entire area,” Sandlin said.
Over the 12 months that ended in September, an array of investors unleashed a shopping spree for proper- ties in downtown San Jose that totaled at least $1.43 billion, this news organization’s survey of county documents determined.
Tech titans Google and Adobe Systems, an array of developers, up-and-coming realty entrepreneurs, along with overseas investors from as far away as Asia were among those that bought properties downtown during that one-year period.
That buying binge in downtown San Jose over the recent 12 months is nearly three times as much as the $484 million buyers spent on downtown properties over the prior one-year period that ended in September 2017.
“This is a very positive time for downtown San Jose and Mayor Sam Liccardo should be applauded for his leadership on what’s going on downtown,” Sandlin said.
Although Foundry Commons is located just outside of the downtown area, experts believe properties on the periphery of the city’s urban core will also be buoyed.
On Oct. 3, Essex Property Trust paid $104 million for Meridian at Midtown apartments at 1432 W. San Carlos St. That 218-unit residential complex is in the Midtown section of the city, which links downtown San Jose with the booming retail centers of Santana Row and Westfield Valley Fair and the Apple campuses farther west.
“You are going to see a lot more jobs downtown, a lot more services to support the new jobs and new residents,” Sandlin said.