Real estate venture buys SV Towers
Experts: San Jose downtown a draw for tech companies
SAN JOSE — The purchase of a South Bay office complex for $62 million — despite being only 51 percent occupied — points to the emergence of downtown San Jose as a destination for tech companies, realty experts said Wednesday.
SV Towers has been bought by a real estate venture that wasn’t deterred by the half-empty status of the office center, which totals 413,000 square feet and consists of two adjacent office towers at the northeast corner of East Santa Clara and North 2nd streets. The San Jose Mercury News is one of the tenants in the newly bought office complex.
“Tech companies want to be in downtown San Jose, so that really sparked interest in buying the property,” said Joe Moriarty, an executive vice president with CB Richard Ellis, a commercial realty brokerage that arranged the purchase for buyer Harvest Properties and partner Invesco Real Estate. “A lot of tech companies want to be in urban environments.”
San Francisco has landed plenty of tech companies. More recently, downtown Oakland has been attracting technology firms. And now, downtown San Jose has begun to capture tech firms.
“Things are definitely looking more promising in downtown San Jose,” said Julie Mercik, a broker associate with Ritchie Commercial, Experts say the purchase of an office complex highlights downtown San Jose as a destination for tech firms. a realty firm that’s active in the downtown area. “It’s turning around.”
Despite the resurgence of the downtown, San Jose’s urban core still faces plenty of challenges. Foremost among them: Downtown San Jose simply doesn’t have very many jobs. Downtown San Jose has about 39,000 jobs, compared with 83,000 jobs in downtown Oakland and 317,000 jobs in downtown San Francisco, according to a U.S. Census Bureau report cited by SPUR, a nonprofit group consisting primarily of Bay Area business and government leaders
Dice.com and Xactly are among the tech companies that have jumped into the downtown San Jose market recently.
“You can walk to lunch, or to work, or walk home if you are in downtown San Jose,” Moriarty said. “You can take transit. There’s more night life there.”
A recent burst of residential construction in the area, with more on the horizon, has helped fuel the interest by tech firms and other tenants to move to downtown San Jose.
“There are multiple offers by tenants on most blocks of office space in downtown San Jose,” Mercik said. “A big proportion of the demand is local consulting, accounting or legal firms, but a big portion of it is new tech firms coming into downtown San Jose.”