Moreland Apartments, a multifamily property at 4375 Payne Avenue in San Jose, was bought for $71 million, according to documents filed on June 13 with the Santa Clara County Recorder’s Office.

The San Jose apartment property totals 160 units, which indicates a value of $433,750 a unit. Moreland Apartments was built in 1982.

San Francisco-based Reliant Group, acting through an affiliate, bought Moreland Apartments, according to the county public documents.

The value was on the low end of apartment purchases in the Bay Area within the last nine months, a review of transactions with multifamily properties shows.

Here are a few examples of what investors have been paying on a per-unit basis in recent deals:

— Southwood apartments in Palo Alto, 100 units. The price was $59.9 million, or $599,000 a unit.

— The Rise in downtown Walnut Creek, 97 units. The price was $57 million, or $587,600 a unit.

— Villa del Sol apartments in Sunnyvale, 124 units. The price was $62.3 million, or $502,400 a unit.

— Artists Walk Apartments in Fremont, 185 units. The price was $89.8 million, or $485,000 a unit.

— Diridon West, 249 units in downtown San Jose. The price was $117.5 million, or $471,900 a unit.

— Modera The Alameda in downtown San Jose, 168 units. The price was $78.2 million, or $465,500 a unit.

— The Kensington in Pleasanton, 100 units. The price was $35.5 million, or $355,000 a unit.

Except for the Sunnyvale apartments deal that occurred in November 2023 and the Fremont apartments deal in September 2023, the examples all involve transactions that occurred in 2024.

Despite the recent softening of per-unit-values for apartment transactions during the last nine months, prices for multifamily complexes are very much in line with price trends before the spikes in inflation and interest rates over the last year or two.

Before the upward surge for interest rates and inflation, here are examples of some per-unit prices:

— The Village Residences in Mountain View, bought in 2019 for a jaw-dropping $963,700 per unit. This $292 million deal for the 333-unit complex was completed in 2019.

— The Platform Urban Apartments in San Jose, 551 units, bought in 2022 for $320 million, or $580,760 a unit.

— The Eleanor apartments in Milpitas, 193 units, bought in 2022 for $333 million, or $579,580 a unit.

— Sofi Waterford Park apartments in San Jose, 432 units, bought in 2020 for $194 million, or $449,070 a unit.

— The Lex apartments in San Jose, 387 units, bought in 2019 for $180.5 million, or $466,408 a unit.

— Park Hacienda in Pleasanton, 540 units, bought in 2020 for $248 million, or $459,260 a unit.

— An 18-story Oakland apartment tower at 1130 Third Avenue, 178 units, bought in 2022 for $55.5 million, or $311,800 a unit.

With interest rates rising, apartment buyers find it tougher to justify purchases unless the prices are sufficiently low for the residential complexes.

The new owner of Moreland Apartments in San Jose, Reliant Group, specializes in market-rate and affordable apartments, according to the real estate firm’s website.

Reliant Group’s affiliate obtained $73.9 million in financing at the time of its purchase of Moreland Apartments, the county records show. This included $60.4 million from Citibank and $13.5 million from Reliant Cap X.

The fallout will spread well beyond owners and banks. Local economies rely on property investors. Their dollars revitalize downtowns with new amenities, jobs and modern real estate. The tax revenue they generate improves government services. Retirement funds have already suffered lower returns on their office investments. IRAs, 401(k)s, pensions and similar investment vehicles are expected to sustain a further drop in yields.

Many people, even entire communities, feel the effect when real estate investors fail. And right now, failure on a large scale appears inevitable.

Falling lease income

Lease income continues to decline. U.S. office vacancy has reached a record 19.8 percent. The amount of unleased space has climbed past its previous high set more than 40 years ago. In the Bay Area, San Francisco and San Jose have eclipsed the national average with office vacancies above 36% and 35% respectively. Oakland’s first-quarter rate was 19.7%. 

Hybrid work policies have driven the rise in discontinued leases. Most companies have leveraged flexible work to shrink their real estate footprint. Many leases have been allowed to expire, and those that are renewed have been cut to half their pre-pandemic size. And the trend lines point down. Offices remain significantly underused, which means corporations will continue to downsize aggressively until they believe their portfolios are optimized.

The reduction in space demand has put intense downward pressure on landlords’ rental income. Asking lease rates appear steady, but the numbers are inflated by owners who wish to avoid reduced property valuations. Landlords are signing deals below their asking rates, and they often seek to draw tenants with longer free rent periods and more generous tenant improvement allowances. True lease rates are substantially lower than what is advertised. The drop in revenue has forced some owners into a deficit. They can no longer afford to fully pay their monthly debt service.

Rising interest rates

Higher interest rates have pushed debtors to the edge. Debt is crucial to real estate investment. Very few properties are purchased entirely with equity. 

In response to inflation, the Fed imposed the sharpest interest rate hikes in four decades. That policy ignited a dramatic increase in debt cost, which exposed many property owners to default. At first, most building owners received flexibility. Banks prefer to avoid real estate foreclosure. When rates increased, bankers calculated that it was smarter to forbear some of the interest they were owed to give borrowers a chance to restore profitability.

But lenders have grown impatient and now want to resolve non-performing loans. That pressure puts many investors at risk of default and the loss of their asset. Delinquent payments, missed maturity dates and special servicer transfers have steadily increased over the past 12 months. And the frequency of office building fire sales has risen.

The Fed has promised rate cuts, but they will not arrive in time for many investors. When rates finally do come down, the relief for distressed owners likely will not be sufficient to make their buildings financially stable.

The way through

There is no way around this problem, but there may be a way through. An axiom of investing asserts that capital is most needed when it is least available. That means office building owners will struggle to raise new debt or equity right now. Many owners cannot endure the severity of this market correction, but those who can and wish to maintain ownership of their assets must find a way to reinvest.

Flexible work has remade the traditional use case for an office. Stubbornly low occupancy has proven that post-pandemic workers require an advanced workplace. Corporate leaders have begun to embrace these changes, and landlords should participate. However difficult, if they invest in modern designs and technology to accommodate our new ways of working, owners can improve their bottom line. Amenity-rich properties with spaces that easily reconfigure will lure more tenants. Buildings that provide digital infrastructure to improve onsite experience, facilities management and sustainability will enjoy lower vacancy and higher lease rates.

Now, in this new world of flexible work, when locations cannot reliably attract office users, owners must convert their buildings to a purpose that is economically viable.

The current downturn has humbled even the most seasoned investors. In the last two years, downtown offices have lost more than 40% of their value. To simply wait for recovery risks an even deeper financial toll. Landlords who wish to survive this crisis must reimagine their properties for a society that has already transformed.

Gabe Burke is a leader in Accenture’s Real Estate & Workplace Solutions consulting practice, which partners with companies to create and implement their post-pandemic real estate strategy.

That was one of the assessments and recommendations from economist Christopher Thornberg during a recent presentation at the San Jose State University Economic Summit at the college’s downtown campus.

Wide-ranging efforts must be conducted to rezone existing office sites so they can be replaced by residential units, Thornberg, economist and founding partner with Beacon Economics, said.

“How do you make housing more affordable? You build more housing,” Thornberg said, urging San Jose and its neighboring suburbs to intensify efforts to rezone wide swaths of commercial properties so housing can sprout on those sites.

“You need to start taking down these office buildings and putting up apartments,” Thornberg said.

However, Thornberg said he prefers “adaptive reuse” of existing office buildings rather than projects that bulldoze office structures. Too much demolition could create “dead zones” in urban areas, he stated in a PowerPoint display that was part of his demonstration.

Thornberg also disagreed with assessments that California is locked in a doom loop characterized by an exodus of corporations and a flight of its residents to rivals such as Texas, Arizona and Florida.

“California is not dead yet,” Thornberg said. “California is doing just fine.”

The Beacon Economics co-founder asserts that the South Bay economy is also in good shape, but like California, must navigate past some hazards to remain robust.

“San Jose is still big in tech but housing and labor shortages are obstacles,” Thornberg said.

In his PowerPoint display, Thornberg listed a few observations about the South Bay economy:

— Labor and housing costs could erode the South Bay’s competitiveness.

— The South Bay needs to find ways to grow its labor pool as a way to attract entrepreneurs.

— Artificial intelligence is not by itself a game changer. AI must become integrated into the larger South Bay economy to start having an impact.

“AI is incredibly important, but AI is not going to rejuvenate the Bay Area by itself,” Thornberg said.

Tech jobs have slumped in the Bay Area since February 2020, which was the final month before state and local government agencies imposed wide-ranging business and office shutdowns to combat the spread of the coronavirus, according to estimates from Beacon Economics that Thornberg presented.

Over the approximately four years from February 2020 through April 2024, here’s how tech industry job totals changed in selected regions, according to the Beacon Economics estimates:

— South Bay tech job fell 1.3%

— East Bay slipped lower by 0.5%

— San Francisco-San Mateo metro, down 2.5%

— California, up 1.6%

— United States, up 4.5%

Some major Silicon Valley rivals posted gains in tech jobs that were double-digit increases over the same period. The Texas cities of Austin and Dallas, and the Alabama city of Huntsville all posted gains of more than 10%. Utah’s Salt Lake City and North Carolina’s Durham managed percent increases in job totals that were nearly double digits.

The boom periods of Silicon Valley’s boom-and-bust cycle have always been fueled in large measure by tech workers who are relatively new to the industry. Thornberg believes that’s why plenty of housing must be available for tech’s new workforces.

“Tech hubs are rejuvenated by young people coming into them,” Thornberg said. “Where are they going to live?”

While the South Bay economy is in good shape, Thornberg warned that the region’s housing crunch could impede future growth.

“The limited housing supply is preventing the hip new tech companies from locating here,” Thornberg said.

Despite the obstacles and difficulties, Thornberg believes the respective economies of the South Bay and California are both in good shape.

Thornberg added that a recession is not on the horizon for the South Bay, California, or nationwide. He predicted that the national economy should grow over the next year at an annual pace of 2% to 3%.

The San Jose region, Thornberg maintains, remains the globe’s primary creator of tech jobs, in Thornberg’s view.

“There is no doubt that San Jose remains a Cadillac economy,” Thornberg said. “This is still the center of the tech world.”

“Flawed information, flawed decisions” is the title of a new civil grand jury report on the county Housing Authority’s botched efforts to handle the purchase and sale of an office building on a prominent north San Jose corner that the housing agency had once eyed as its headquarters.

The Housing Authority’s purchase of the office building and the agency’s subsequent sale of the empty property triggered a stunning $16.2 million loss in less than two years for the county organization, the grand jury determined in its June 10 report.

The office building in question is located at 3553 North First Street, a two-story structure that totals 86,100 square feet — but just as importantly, occupies a choice six-acre parcel next to a busy light rail line.

The county housing agency’s blunders arose from its efforts to find a future headquarters for its staff and client meetings.

At the time, Katherine Harasz, Housing Authority executive director, described the office building purchase as a deal that would provide “much-needed expansion space for staff” and plentiful parking for visitors and clients.

Harasz retired in 2021 and was replaced by a new Housing Authority executive director, Preston Prince.

In September 2022, the Housing Authority sold the office building — which the county agency never occupied — for only $24 million. That was a core loss of $13.5 million.

Insurance, maintenance, deferred maintenance and other costs tacked on another $2.7 million, which produced the overall loss of $16.2 million for the office building, the Grand Jury report found.

The Housing Authority’s quest for a new headquarters began because its downtown San Jose offices at 505 West Julian Street were too old and cramped.

An early option was constructing a new headquarters on East Santa Clara Street near the downtown. The Housing Authority deemed that project’s $100 million cost prohibitively expensive.

That eventually led the Housing Authority to the 3553 North First site, a property purchase that became a financial fiasco for the county agency, the grand jury report found.

The Housing Authority created an ad hoc committee composed of three members of its board to review the options for the future of the office building it had bought in late 2020.

“The board (of the Housing Authority) and the (ad hoc) committee had a fiduciary obligation to examine all viable options for using or repurposing the (3553 North First Street) property to maximize long-term value to the organization and to further the Santa Clara County Housing Authority’s mission,” the grand jury stated in its report.

Instead, the Housing Authority’s top brass, led by Prince, failed to fully present the options that the county agency could pursue regarding the office building, the grand jury report found.

“Santa Clara County Housing Authority executive management presented,” the grand jury stated in its report “financially flawed analyses, and evaluated only options to sell the property without seriously or rigorously considering alternatives.”

County Housing Authority officials defended the decision to sell the building.

“We reviewed the location through a resident and community-centered lens, analyzed the options, and made an informed decision to sell the building,” County Housing Authority executive director Prince said. “The loss was not taken cavalierly.”

Prince noted that the Housing Authority board and community members supported the recommendation to sell the office building.

“There were turbulent market conditions post-COVID, and we wanted to respond to the needs of our residents and the affordable housing crisis in Santa Clara County,” said Jennifer Loving, chairperson of the Housing Authority’s board. “The board of commissioners stands united behind our leadership and staff.”

Among the possible alternatives to a sale, according to the grand jury:

— occupy the property until office market prices rebounded and sublease surplus space.

— lease the property until prices rebounded. This was viable because the Housing Authority paid cash for the office building and wasn’t under pressure to repay a real estate loan.

— rezone the property to enable affordable housing development on the entire site.

— rezone the property for a hybrid development. This option would have retained the existing office building and constructed affordable housing on part of the six acres.

Instead, the Housing Authority’s executive management steered the agency’s board into a narrow set of options.

“Executive management selectively filtered information to present only what they thought should be reviewed by the board,” the jury’s report stated. “The civil grand jury learned that executive management informed members of the committee and the board that the only viable option was to sell the property quickly.”

The muting of certain options appears to be a severe failure, in the view of Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.

“This report shows a lack of governance by the Housing Authority board over (executive director) Preston Prince and his executive staff,” Staedler said. “They have both failed the Santa Clara County Board of Supervisors in their role.”

In 2022, Staedler suggested that the civil grand jury launch a probe into the real estate debacle.

“The lack of transparency and misrepresentation of the material facts cannot be excused,” Staedler said.

The report also determined the five-member county Board of Supervisors took a lax approach in reviewing the Housing Authority’s floundering commercial real estate adventures on North First Street.

“The civil grand jury was surprised to learn that some county supervisors were unaware the Housing Authority had lost millions on the property,” the scathing report determined. “(Other county supervisors) were indifferent to the Housing Authority’s financial loss because the loss did not come from county funds.”

The errors were compounded by what seemed to be lax oversight by the county Board of Supervisors while the housing agency floundered with the North First Street site, the grand jury stated.

“This laissez-faire attitude is concerning to the civil grand jury,” the report stated. “The county Board of Supervisors must be acutely aware that any significant loss of public funds for housing is a lost opportunity for the county to address the overwhelming need for affordable housing opportunities.”

The tower at 1700 Broadway — a 10-story highrise in downtown Oakland’s bustling Uptown district — is now owned by its lender following the foreclosure, documents filed on June 7 with the Alameda County Record’s office show.

Bank of the Sierra seized the Oakland tower during a public property auction.

Since no buyer emerged for the highrise, Bank of the Sierra took ownership of the building through a proceeding that placed a $4 million value on the building.

That amount is a jaw-dropping 69.9% less than the $13.3 million the prior owner, an affiliate controlled by HP Investors, paid in 2017 to buy the building. HP Investors is a real estate firm based in the San Diego County city of Solana Beach.

In 2020, the HP Investors affiliate landed a $9.1 million loan for the 1700 Broadway building that flopped into delinquency in February 2024. The building is located at the corner of 17th Street and Broadway.

The downtown Oakland foreclosure suggests the post-coronavirus economic maladies that have infected the commercial property markets in the Bay Area have yet to run their course.

Some experts believe lenders could seize more office and retail buildings in the wake of loan delinquencies.

At the end of March 2024, downtown Oakland’s office vacancy rate was 19.7%, slightly worse than the vacancy level of 19.6% at the end of December 2023, reported Colliers, a commercial real estate firm.

The slender Oakland highrise seized this month through the foreclosure totals 31,500 square feet. The building also has 3,500 square feet of ground-floor retail.

Since lenders are typically reluctant to own foreclosed real estate, potential next steps would be for Bank of the Sierra to put the Oakland tower up for sale and scout for a buyer.

The Building and Construction Trades Council of Alameda County, a major East Bay labor organization, and the general contractor for the project — Rudolph and Sletten, a big-time construction firm — crafted a jobs deal for the project. Overaa Construction, the general contractor for a series of site improvements on the campus, also signed the labor agreement.

The $1.6 billion development would create a landmark, state-of-the-art hospital and trauma center for children on the medical center campus at 747 52nd St. in Oakland.

“The new hospital project is our covenant to the community to take care of all kids regardless of their socioeconomic level,” Dr. Nicholas Holmes, president of UCSF Benioff Children’s Hospitals, said in an interview with this news organization about the project. “This is to provide the best possible care for children through the region.”

The deal assures priority will be given to hiring of local workers for what would be a years-long project that’s slated to be completed in 2030.

“This project is a huge investment in our community that will include union workers from the ground up,” said Andreas Cluver, secretary-treasurer for the Building and Construction Trades Council of Alameda County. “We’re making sure that local residents have access to these jobs, whether they are new to construction or masters in their trade.”

The massive development is expected to double the size of the emergency department, add a new diagnostic imaging suite and increase room sizes as part of a wide-ranging modernization, upgrade and expansion.

“We have outgrown the size of the existing facility,” Dr. Holmes said. “The real driver of this is to meet the needs of the community.”

The workforce agreements set a 30% local hiring goal for both contractors and subcontractors, which UCSF Health described as its commitment to supporting the local economy.

The new and expanded hospital complex will help ensure that children in the East Bay and other areas can be sure to receive top-notch medical and trauma care.

“This will help with patient flow,” Dr. Holmes said. “As a safety net hospital, we want to be sure there are no deterrents to a child receiving medical care and to ensure no child is turned away.”

The project also will add dedicated mental health inpatient beds to address what UCSF Health officials believe is a pressing and unmet need for adolescent mental health care and services.

The five-year construction endeavor is expected to require the hiring of about 400 workers a year until the project is completed in 2030 when the new hospital will open.

This summer, UCSF Health will seek approval from the UC Regents for the hospital project and campus revamp.

“The construction and building trades are the backbone of Oakland,” Oakland Mayor Sheng Thao said. “This project will bring well-paid jobs for union construction workers, job training for apprentices, and new careers for veterans.”

Plus, once the hospital is open, it’s likely that additional hospital staff, including nurses, will need to be hired to work in the new medical center.

“This project is not only for the physical and mental well-being of our community, it also is for the economic vitality of Oakland itself,” Dr. Holmes said. “We will increase the staff accordingly, as mandated by nurse-patient ratios.”

Blue Owl Real Estate Capital, through an affiliate, paid $35.5 million for the office building at 1010 Rincon Circle, documents filed on June 10 at the Santa Clara County Recorder’s Office show.

The Chicago-based real estate firm bought the building through an all-cash deal.

Newmark commercial real estate brokers Steven Golubchik, Edmund Najera, Jonathan Schaefler and Darren Hollak arranged the transaction.

The price Blue Owl Real Estate paid is 8.9% higher than the $32.6 million that the seller — a joint venture of Machine Investment Group and Baudpont Capital — paid for the building in November 2021.

Even so, investing in American stocks would have paid out more.

Over the same period from November 2021 through June 10 that the sellers owned the building, the S&P 500 Index — the broadest measure of U.S. stocks — rose 14%.

The local inflation rate also outpaced the building’s value. Bay Area consumer prices rose 11.2% over the same period the sellers owned the office site.

Soon after buying the 90,900 square foot office building, Machine Investment and Baudpont Capital attempted to sell the property by flipping it.

In the spring of 2022, just months after buying the office building, Machine and Baudpont offered the building for sale with an asking price of about $55 million.

At the time, the Bay Area office market’s weakness had yet to come into view in the wake of the coronavirus outbreak that spawned government-mandated business shutdowns starting in March 2020.

In 2022, the tech industry’s waves of Bay Area layoffs amounted to no more than a barely noticeable ripple for the region’s economy.

By 2023, however, the tech sector’s job cuts swamped the commercial real estate market and washed away office building values in the Bay Area.

These weaknesses in the regional office market are a reminder that some segments of the Bay Area economy have begun to erode due to the economic afflictions that the coronavirus unleashed.

Essentially, buildings that lack tenants can’t generate income so property owners can pay off their mortgages — a dynamic that throttles cash flow and frequently shoves buildings into foreclosure.

In the case of the 1010 Rincon Circle building, which is near the interchange of Interstate 880 and Montague Expressway, the building is fully occupied by a robust tech tenant.

Quanta Cloud Technology, also known as QCT, leases all of the 1010 Rincon Circle building through a long-term rental deal.

QCT provides hardware and cloud-based software for data centers, which are a fast-growing tech industry sector. QCT also is a significant player in the artificial intelligence sector.

“1010 Rincon offers a prime opportunity for a durable cash flow stream, secured for 10 years by a leading AI server company within this state-of-the-art research and development facility,” said Golubchik, a Newmark executive vice chairman.

The highly anticipated project — known as Downtown West — would add office buildings, housing, shops, restaurants, parks, open spaces, entertainment hubs, cultural loops and hotel rooms to a mile-long area near the Diridon train station and SAP Center.

The affordable housing could sprout on a portion of the old Orchard Supply Hardware store. One of the buildings in that long-shuttered retail center was recently demolished.

Following this year’s demolition of the building at 720 West San Carlos Street, Google is evaluating its affordable housing development options at the site, according to Ryan Lamont, a Google spokesperson.

If a development proposal proceeds at the location, that would mark Google’s first distinct project in the Downtown West neighborhood on the western edges of downtown San Jose.

It’s a hopeful sign that Google is taking action on its development,” said Leah Toeniskoetter, president and chief executive officer of the San Jose Chamber of Commerce. “This is very positive.”

The precise timeline for the new neighborhood turned murky in February 2023 when Google disclosed that it was “reassessing” how best to move ahead with Downtown West, including the village’s launch date.

“Any development that puts residents and potential consumers in downtown San Jose is always welcome,” said Nick Goddard, a senior vice president with Colliers, a commercial real estate firm. “It would be nice to see this get going,” he added, referring to the Downtown West neighborhood.

Google is also evaluating any considerations related to the development agreement that it concluded with the city of San Jose, according to Lamont.

In 2021, the San Jose City Council approved a development agreement with Google that sketched out the general concepts for the new neighborhood, along with associated community developments.

No precise proposals for a specific site or sites within the Downtown West footprint have emerged.

The prospect that an affordable housing development might rise atop part of the old Orchard Supply site emerged after Jamestown LLC, Google’s development partner for Downtown West, requested meetings with four top San Jose city officials, all members of the city staff and not the mayor or City Council members.

Jamestown LLC requested meetings with San Jose’s planning director, economic development director, housing director and deputy city manager, according to information posted on a San Jose city site that details potential meetings that lobbyists have with key city officials, including politicians.

“Advancement of affordable site, potential development agreement amendment” was listed as the topic of the meeting.

If Google decides to proceed with — and gains approval for — an affordable housing development at the West San Carlos Street location, it would assuage some of the doubts about the future of the project that arose in the wake of the search giant’s decision to reevaluate the timeline for Downtown West.

Google is hardly the only tech company that has conducted layoffs in the Bay Area and nationwide. About 200 different tech companies have revealed plans to cut jobs in the Bay Area alone.

Tech titans such as Facebook app owner Meta Platforms, Tesla, Cisco Systems, Broadcom, Salesforce, Intel, Twitter, PayPal, LinkedIn, Amazon, Apple, Lyft, eBay and Lam Research also have filed WARN notices detailing Bay Area job cuts.

Even in the face of Google’s own layoffs, the search giant’s ongoing interest in downtown San Jose is in concert with the company’s stated strategy to cut jobs in some segments even as it seeks to ramp up hiring in promising arenas such as artificial intelligence.

While it’s unclear what kind of corporate footprint Google envisions over the next year or two, what is clear is that Google’s Downtown West neighborhood is poised to be a game-changer for San Jose.

“The area around Diridon Station and SAP Center has so much potential,” Toeniskoetter said.

The search giant expects to employ as many as 20,000 tech workers within the transit village’s footprint, once the office buildings are complete, a process that will likely occur in phases.

“Google has always said it would be a 10-year project,” Goddard said. “Google is publicly committed to this development, and their actions tend to confirm that.”

Primestor Development has paid $36.5 million to buy Hilltop Plaza, a retail center whose primary merchants include Ross Dress for Less, City Sports Club, dd’s Discounts, and a Century Theatres movie complex.

“Hilltop Plaza matches our criteria and goals for redeveloping centers tailored to the communities they serve,” said Alan Sneider, Primstor’s vice president of acquisitions. “This is a great project with which to expand our portfolio.”

The new owner hopes to revamp the retail center and upgrade its ability to serve the Richmond community. The 59-acre center is located at 3190-4251 Klose Way in Richmond near the interchange of Interstate 80 and Richmond Parkway.

“Hilltop Plaza represents the opportunity to acquire a strategic infill project that aligns with our investment strategy of empowering communities through the acquisition and management of institutional quality real estate,” said Lonnie Vidaurri, chief investment officer with Primestor Development.

“Primestor has a 30-year track record of success fostering local economic development in urban, underserved minority communities,” the company states on its website. Primestor is based in the Los Angeles County municipality of Culver City.

Hilltop Plaza, which totals 245,900 square feet, is currently 86% occupied.

“The project is characterized by high barriers to entry” and “a rapidly expanding minority population,” Vidaurri said.

Primestor is already pursuing additional merchants to increase the retail center’s occupancy.

“We are actively negotiating with several prospective tenants that would be excellent additions to the tenant mix and bring attractive offerings to the local community,” said Rhiana Lindsey, Primestor’s director of leasing.

BioCube is attracting biotech, life science and tech companies to its new incubator hub in north San Jose. Business is brisk enough that the executives behind the complex plan to build out the second phase of the site.

“We are creating workplaces so companies can start at BioCube and then growth in place right here,” Gonzalez said in an interview with this news organization. “This is a complete ecosystem for startups that are growing.”

The company operates BioCube San Jose North at 2680 Zanker Road, an office and research building with multiple lab spaces that totals 70,000 square feet.

The first phase of the building totals 35,000 square feet and is about 35% leased to an array of companies.

The companies that are occupants in both the northern and southern BioCube incubator hubs are typically early-stage biotech, pharmaceutical and biopharma companies, as well as clean tech, greentech and battery technology firms.

The labs are paired with office suites, flexible meeting spaces, advanced kinds of break rooms, and modern outdoor areas.

BioCube San Jose North was designed to be flexible enough to accommodate companies that need small spaces to conduct cutting-edge research, along with spaces to handle the same companies, or other firms, that are larger and in a growth spurt.

“Recently, we have seen a lot more activity” from companies seeking to occupy spaces in BioCube San Jose North, said Peter Conte, a national director for life sciences with Transwestern, a commercial real estate firm. Conte added, “We’re getting a lot more traction.”

BioCube is preparing the unoccupied 35,000-square-foot portion of the building to enable startups that might eventually seek expansion space.

“Our activity is going better than the general office market,” Conte said.

The BioCube developers know the Bay Area office market is taking on water as it navigates through a storm surge of empty spaces, slumping building values, a wave of foreclosures and feeble rents.

“We are all experiencing the same economic downturn,” Gonzalez said. “We are not immune from it.”

Gonzalez hopes that the BioCube hub in north San Jose can experience the same level of success that the BioCube San Jose South site at 941 Optical Court has experienced.

That south San Jose incubator, which totals 67,000 square feet, is about 95% leased.

“BioCube has already incubated more than 100 and currently serves a diverse portfolio of companies advancing research and development in pharmaceuticals, biotechnology, medical devices, biomedical technologies, genomics, cleantech, and food tech,” according to information released by BioCube.

“We can accommodate up to 70 companies here,” Gonzalez says of the BioCube San Jose North site.

BioCube eschews the conventional leasing arrangements that stretch from five to 10 years, or even longer. Instead, the company offers month-to-month leases with 90 days’ notice that a tenant will exit the space.

This is the flexibility that is needed in a post-coronavirus world characterized by an uneven and incomplete return to the office, in the view of Gonzalez.

“Companies at BioCube can all grow in place,” Gonzalez says of the BioCube San Jose North incubator. “We can accommodate up to 70 companies here.”