SAN JOSE — A big mixed-use complex in west San Jose has chugged forward with the purchase of properties the project’s developers need to build a new office, housing, and retail center on Stevens Creek Boulevard.
An affiliate linked to a joint venture of Miramar Capital Group and Machine Investment Group has bought a choice site on Stevens Creek Boulevard between Palace Drive and Kiely Boulevard that will provide the land for the development of the project, according to Santa Clara County public records.
Stevens Creek Promenade, as the development is known, is expected to dramatically change that section of western San Jose by adding modern offices that could be suitable for a tech company, as well as new homes, including affordable residences, and local retail outlets.
Colliers International Institutional Capital Markets brokers Bob Gilley, Kevin Moul, Andy Zighelboim, Brad Idleman, and Andrew Gibson represented the buyer and the seller in the deal.
“The new ownership group has the flexibility of moving forward with a significant redevelopment of the property,” Colliers said.
Santa Monica-based Miramar Capital Group and Machine Investment, acting through affiliate MPG Stevens Creek Owner, paid $54.5 million for the property, county documents show.
“It’s exciting to see such a well-capitalized group like Miramar take a strong interest in this part of San Jose,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. “Miramar’s involvement is a good sign that this project is going to get developed.”
Stevens Creek Promenade is expected to add at least 233,000 square feet of office space, up to 582 residential units, of which 88 would be affordable dwellings, along with about 10,000 square feet of ground-floor retail.
“This is an excellent project,” Staedler said.
A JLL Capital Markets team of brokers, Alex Witt, Brandon Roth, and Spencer Bergthold, arranged $33.3 million in property financing on behalf of the buyer that was provided by California Bank and Trust.
“Despite the market uncertainty caused by Covid-19, California Bank and Trust delivered accretive financing for the acquisition,” Witt said.
The seller was an affiliate of Fortbay, a Los Gatos-based development firm that steered the project through the city approval process. The Fortbay affiliate paid $53 million in 2016 to obtain the development site.
The project also fits into ongoing efforts to greatly upgrade with new development ventures the long corridor of Stevens Creek Boulevard and San Carlos Street.
“Stevens Creek and San Carlos have a lot of development potential,” Staedler said. “It’s not going to happen overnight, but there is a lot of interest in this area.”
In the middle of the corridor are Westfield Valley Fair and Santana Row, two iconic malls that are commerce hubs in the area.
At the west end are digital hubs whose primary occupant is tech titan Apple.
Downtown San Jose is at the east end of this corridor, where search giant Google plans a mixed-use neighborhood, savvy developer Jay Paul is building and planning new tech campuses, developers Urban Community, Westbank, and Urban Catalyst are eying an array of projects, and Adobe is constructing a new office tower.
All of this development interest means a project such as Stevens Creek Promenade could provide a significant increase in activity in the corridor.
San Jose city officials approved the Promenade project in 2019. The time frame for a construction start wasn’t immediately known. Miramar Capital didn’t respond to a request for a comment about the situation.
“This project fits the vision of a vibrant development where people can live, work, and play in an urban village setting,” San Jose Mayor Sam Liccardo and Vice Mayor Chappie Jones stated in a February 2019 memo about the project. “It will also serve as a catalyst for future growth along Stevens Creek Boulevard.”
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