J. Paul Company has hit the brakes on a 3.4 million square foot high-tech office, retail and restaurant complex in downtown San Jose.
SJ Cityview, an affiliate of the San Francisco-based development company, has received a development permit for the block-sized site bounded by Almaden Boulevard, West San Fernando Street, South Market Street and Park Avenue in San Jose. requested a five-year extension. Mercury News reported.
Jay Paul’s development permit is scheduled to expire in June 2025. A five-year extension would allow construction of the megaproject by June 2030.
The City Planning Department is expected to make a decision on the extension within the next two months.
In 2018, Jay Paul affiliates paid $283.5 million in cash for nearly all of Cityview Plaza, a 580,000-square-foot office, shopping and restaurant complex downtown.
The developer then purchased two adjacent properties and plans to redevelop Cityview Plaza with three interconnected 19-story office towers containing 3.4 million square feet of offices, shops, and restaurants. I set it up.
The new City View will also include an 85,000 square foot rooftop terrace and an 80,000 square foot gym.
But with interest rates rising and Silicon Valley’s office occupancy rate now at 20.8%, Jay Paul sought to delay construction given the less-than-ideal office market, according to CBRE.
“Due to current financial markets and reduced demand for office rentals, the short-term rental feasibility of this project cannot be maintained within the currently established schedule,” Jay Paul wrote in a filing with city planners. It’s gone,” he said.
Last year, Jay Paul completed a 19-story, 971,000-square-foot office tower at 200 Park Avenue, across from the Cityview Plaza development.
The City View Plaza delay seems like a good move, said Phil Mahoney, a Newmark commercial broker who is trying to land one or more tenants at 200 Park Tower.
“It makes sense for Jay (Paul) to hold back on City View,” Mahoney of Newmark’s San Jose office told the Mercury News. “Given the current demand, it doesn’t make sense to build any more office space.”
The Jay Paul Company, led by billionaire Jay Paul, has developed 12 million square feet of office space in Silicon Valley and is home to companies such as Hewlett-Packard, Amazon.com and Apple, according to Forbes. I am renting an office in. The developer also owns properties in Santa Cruz, San Diego and Austin, Texas.
— Dana Bartholomew
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