Downtown San Jose gas station is bought, hundreds of homes planned

SAN JOSE — A gas station at a prominent downtown San Jose
corner has been bought by an increasingly busy development company
that plans to construct a housing tower with hundreds of
residential units.

Urban Catalyst has bought the site now occupied by a Chevron gas
station at the corner of East Santa Clara and North Fourth streets
— one of the few fuel stations in downtown San Jose — and says
it is planning a mixed-use residential and retail development on
the key street corner.

“We are going to do high-rise residential with quality retail
on the ground floor,” said Erik Hayden, founder and managing
partner with Urban Catalyst.

Urban Catalyst was formed to establish and guide an investment
fund that can capitalize on the tax savings made possible by
opportunity zones.

“We are looking to develop 250 residential units,” said
Joshua Burroughs, Urban Catalyst’s chief operating officer.

Urban Catalyst, acting through an affiliate, UC Chevron, paid
$15.9 million for the gas station site at 147 E. Santa Clara St.,
according to property records filed on Aug. 2 with Santa Clara
County. The transaction was arranged by Mark Ritchie, principal
executive and broker with Ritchie Commercial, a real estate
firm.

The buyer also obtained an $11 million loan from Acore Capital
to help finance the purchase of the Chevron station site. Acore
Capital has become an active lender in downtown San Jose and other
parts of Silicon Valley within the last two years.

The property that’s just been bought by Urban Catalyst is
perched on one quadrant of a downtown San Jose intersection that is
poised to undergo a dramatic transformation and upgrade, propelled
by widening interest from active developers in the area.

“This is a key development site downtown,” Ritchie said.
“This corner is becoming one of the important intersections in
downtown San Jose.”

Besides the gas station site, the corners of Fourth and Santa
Clara streets also feature the under-construction Miro residential
towers that bid to be iconic additions to the downtown skyline; San
Jose City Hall; and bustling 4th Street Pizza.

Adding to the activity at the intersection, Bayview Development,
the developer and the owner of the Miro towers project, have bought
the 4th Street Pizza property and a parcel two doors away on East
Santa Clara Street.

Urban Catalyst is the latest player to emerge as an active
investor in downtown San Jose since Google announced plans for a
transit-oriented village near the Diridon train station. Jay Paul
Co. and Gary Dillabough also have become significant investors in
the downtown area. Plus, legendary developer Sobrato Interests
plans to build a striking office tower at South Market and West San
Carlos streets.

The prospect of two new BART stations in downtown San Jose has
also prodded developers. One BART stop will connect to the Diridon
transit hub, and the other is slated to emerge at First and Santa
Clara streets, just a few blocks from the Chevron station site.

“This is right in the heart of the downtown,” Hayden said of
the Chevron site. “And with the BART stop planned for right down
the street, this is going to be a true transit-oriented
development.”

The parking for the new project will be above ground and is
going to be configured in such a way that the parking structure
could someday be converted to residential units should people drive
fewer cars as time passes, Burroughs said.

The new owners have provided the gas station with a lease so it
will remain open for a considerable time since it could be a couple
of years before actual construction begins on the new housing
tower.

“I’ve run this station for 18 years, and it’s been a
Chevron station for about 50 years,” said Manraj Natt, the owner
of the gas station.

For Ritchie, the sale of the gas station property represents a
successful culmination of his efforts to find a buyer for the
property, a quest that began roughly a decade ago.

“We had a buyer, and then the economy tanked, and another
buyer went away,” Ritchie recalled. “It’s finally
done.”

With the most recent purchase, Urban Catalyst, which describes
itself as the first opportunity fund in Silicon Valley, has now
spent $30.6 million buying sites in the Bay Area, all of them in
downtown San Jose. The company intends to eventually undertake 10
distinct projects in San Jose’s urban center.

Urban Catalyst doesn’t intend to be idle for long with the
shopping cart that it’s stuffed with a growing number of
properties.

“Most of our construction will start in 18 to 24 months, if
not all of it,” Hayden said.

 

Source: FS – All – Real Estate News 1
Downtown San Jose gas station is bought, hundreds of homes planned