SAN JOSE — It’s a project that may be a sign of the times as hybrid work takes hold: Developers hope to build hundreds of apartments in San Jose on a surface parking lot that serves an existing office building.
A 250-unit housing development is being eyed at 2150 North First Street in San Jose, a project that would sprout atop a surface parking lot, according to documents on file at City Hall.
Housing development of 250 apartments proposed next to an office building on the same parcel at 2150 North First Street in San Jose, concept. The new residential building is in the center, while the existing office building is left center. (Perry Architects)
Expansive, a coworking firm, the owner of the development site as well as the adjacent office building, has proposed the housing project.
The coworking company, according to the public city documents, will retain the office building and develop the housing on an adjacent section of the 4.7-acre site in north San Jose.
2150 North First Street, a six-story office building in north San Jose. (Google Maps)
Chicago-based Expansive offers shared workspaces within the building. Aviz Networks, Akamai Technologies, The Collective interior design, Sun-Net and Resonac America are among the tenants in the building, according to Google Maps.
The housing development would be eight stories, while the existing office building is six stories, the project plans show. The office building totals 122,500 square feet, according to the LoopNet commercial property listing service.
The new apartment building would contain 370 parking stalls on three levels of the structure.
Of the 370 stalls in the new residential building, 250 would be set aside for apartment occupants and 120 would be provided for office workers. In addition, another 122 surface parking spaces would be set aside for office workers.
The aggregate total of 250 parking spaces for residential occupants and 242 parking spaces for office workers meets the city’s minimum parking requirements for that many housing units and an office building of that size, the city plans state.
This proposed project appears to be a way for the owner of an office building to create value and generate cash flow from residential rents by creating housing on a surface parking lot in the Bay Area.
Expansive, acting through an affiliate, bought the office building and adjacent parking lots in 2019, paying $42 million for the building.
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The year of the purchase, 2019, marked the final year before the outbreak of the coronavirus that triggered government-mandated business shutdowns to combat the spread of the deadly bug.
Even after government agencies terminated the lockdowns in February 2023, workers have returned to the office at an uneven pace after three years of becoming accustomed to remote work such as conducting job tasks at home.
Ominously, in late 2022, throughout 2023 and so far in the early stages of 2024, tech companies began to jettison workers and shed office space in a quest for greater efficiency.
The tech sector’s cost-cutting gambit shoved office vacancies to record-high levels in the Bay Area.
These forbidding outcomes have eviscerated property values for office sites throughout the region and forced commercial real estate owners to find ways to rescue, re-purpose, or replace their office buildings.
In numerous instances, owners have floated proposals to convert their office buildings into housing or to bulldoze the office structures to clear the way for new housing.
The 2150 North First project appears to be an instance in which the owner of an office building on a large parcel has decided to preserve the offices but build housing next to the same property.