Bids Due for Large, Bank-Owned Valley Land Site
Submitted July 22, 2010, 6:33 PM
Buyers have until Aug. 3 to submit offers to purchase a critical 43-acre corporate campus development site along the city of San Jose’s famed North First Street corridor.
Touted as the last large remaining corporate campus site in the area, the property at 2347 N. 1st St. is owned by Bank of America. The bank foreclosed Feb. 19 after the borrower, an investment fund controlled by Tishman Speyer Properties, defaulted on an $86.2 million loan.
John Yandle and Mark Ziemendorf, brokers at Cornish & Carey Commercial, are handling the offer, which is unpriced.
The property (CLICK ON PICTURE ON LEFT) is entitled for 2.8 million square feet of offices in nine buildings and 100,000 square feet of supporting retail. The plan is for the site to become a single, large corporate campus or a selection of corporate headquarters, each occupying a building or more. The buildings are not intended to support multi-tenant occupancies.
Ru Weerakoon, a long-time economic development official for the city of San Jose, has said it is nearly impossible to overstate the site’s importance to the city. North First Street is the spine of San Jose’s largest concentration of corporate citizens including a massive Cisco Systems Inc. footprint, EBay Inc., and dozens of others. In the next two years, Brocade Communications Systems Inc. is to occupy a new corporate headquarters in the 1.35 million square foot @First development now under construction at North First Street and state Highway 237.
City planning put in place in the last several years lays the foundation for North San Jose to transition from a largely low-density industrial park use to a much higher-density collection of mid-rise offices, 32,000 new housing units and 1.7 million square feet of additional commercial space. The city hopes to draw more than 80,000 new jobs to the area. The plan contemplates a 600-acre “industrial core” on either side of North First Street as part of its larger vision. The site sits near the center of that core. The city envisions adding 16 million square feet of industrial development to the core in four- to 12-story buildings. A light-rail line runs the length of North First Street into neighboring Santa Clara.
The bank set a minimum bid of $50 million in late February when it offered the property for sale on the Santa Clara County courthouse steps; it had no takers. Since then Cornish has undertaken a global initiative to market the site to more than 5,000 potential buyers. It expects to receive multiple bids, Yandle said. Those interested run a gamut including “commonplace [developer] names in the valley, to people and money well outside the area, to those who are partnering with local operators,” he said. Some are land speculators; others are developers who are interested in building out the entire site.
The property has sold twice in the last 10 years, first to software company BEA Systems Inc., which acquired it from Agilent Technologies in the last days of the dot-com boom for more than $300 million, or $148 a square foot. Tishman bought the property from BEA in March 2007, just before the world financial collapse, paying $60 a square foot, or more than $110 million.
