By Jon Peterson
The Registry – Bay Area Real Estate 3/10/2014
Reaching a new milestone with the city of San Jose’s planning department, Cupertino-based KT Properties is now moving ahead with plans for its major apartment project in downtown San Jose, the St. James Towers.
“We are expecting that we would be starting the project at some point before the end of 2014. The expectation is that the total cost of the development would be somewhere in the range of $250 million,” says Ken Tersini, a partner with the real estate development firm.
KT will not be funding this project on its own. “We are now down to talking to two partners for this project. We prefer not to release any information on this part of the project at this time,” said Tersini.
KT does have a history of selling projects before the development has been completed in San Jose. It sold the 312-unit One South Market Street project in downtown San Jose to Palo Alto-based Essex Property Trust. This development is currently under construction.
St. James is located directly across the street from San Pedro Square Market. It will have a total of 643 apartment units and 20,000 square feet of retail. KT is figuring on a 22-month constructing time schedule. The project will have two residential towers. The second tower will be started six months after the first tower is completed.
Tersini sees that there are many transportation options for residents living in an apartment complex in downtown San Jose. “People can get around through a variety of public transportation options. These include [Caltrain], light rail and eventually there will be BART downtown,” said Tersini.
He expects to see a great deal of interest in his project from a variety of renters. “There will be young professional workers who want to be close to where they work and be near the activity of the various forms of bars, restaurants and other forms of entertainment. I would think we would also get some empty-nesters who want to move from the suburbs back to a more urban style of living,” said Tersini.
KT sees a pretty tight apartment market existing in the San Jose area. “I would guess that the current vacancy for apartments in San Jose is something in the range of three percent to four percent,” he said.
The city’s officials along with a slew of urban-minded organizations have made a concerted effort to welcome companies into its downtown core. At last week’s presentation by SPUR San Jose titled The Future of Downtown San Jose, a six-step plan was presented to the public to help engage a discussion around how San Jose could achieve those goals. “We want to have diversity in terms of what we’re offering downtown. We want it to be a central business district, we want it to be a central social district,” said Garrett Herbert, partner of merger and acquisition transaction services at Deloitte, who was on the SPUR panel.
Apigee, an enterprise API management firm, has recently moved to downtown San Jose from Palo Alto, and the city announced Edgewater Networks move to the Edenvale neighborhood just last week. The civic leaders hope that the commercial activity will inspire people to live in downtown San Jose, and KT’s planned towers could offer a supply of the housing stock needed to accommodate larger demand.
KT Properties is a developer of apartments and commercial/industrial projects. The company focuses on assets in the San Francisco Bay Area and beyond for its developments.
Image courtesy of friends4expo.org