Urban Catalyst, a developer in downtown San Jose, has secured construction funding and permits to transform a closed movie theater into a new office and retail space.
The company said it has obtained a building permit for the 100,000 square foot project and obtained a $ 56.2 million construction loan via Rialto Capital. Jordan Angel, Managing Director of JLL Capital Markets, arranged the loan.
âBringing this mix of new retail and office space into a long-shuttered building is the very definition of urban revitalization,â said Erik Hayden, founder and CEO of Urban Catalyst, in the statement.
Nicknamed “Paseo,” the three-story development is located at 201 S. 2nd St., a sought-after address in the heart of San Jose thanks to its proximity to a light rail station and San Jose State University. It’s also on Paseo de San Antonio, which is lined with storefronts and connects the university to the heart of the city’s downtown core.
âThe Paseo de San Antonio is a ‘row of restaurants’, and we’ll add to that,â said Hayden. The real deal Monday.
Urban Catalyst is negotiating with three different full-service bar and restaurant operators to lease most of the retail space on the ground floor of Paseo, which totals approximately 25,000 square feet, said Hayden. He declined to disclose the names of these operators, but said he plans to announce them once the leases end. Nick Goddard, senior vice president at Colliers, is the listing broker for the retail space.
The project’s 75,000 square feet of Class A office space is spread over its top two floors. Everything is still available for rent, and Urban Catalyst is aiming for a single tenant to occupy both floors, said Hayden.
Each floor has a built-in mezzanine and walkways that connect to a roof garden. These features and the 35-foot ceilings on each office level make it a workspace unlike any other workspace in downtown San Jose, said Hayden. Jeff Arrillaga, vice president of Newmark, is the listing broker for the Paseo offices.
Swenson Builders, who Urban Catalyst hired as the general contractor for the project, plans to begin construction immediately, Hayden said. This work is expected to be completed in July 2022, according to the Urban Catalyst press release. Most of the interior of the existing building was demolished by Buccaneer Demolition Inc., although structural demolition work remains, Hayden said.
Paseo is the first of six downtown San Jose projects that Urban Catalyst intends to start building over the next 12 months, said Hayden. All are part of a developer-created fund focused on ‘zones of opportunity’, which were created by the Tax Cuts and Jobs Act of 2017 to boost development in low-income communities. returned.
These zones allow investors who invest unrealized capital gains in opportunity zone funds to defer payment of capital gains tax on that money until December 31, 2026.