Urban Catalyst Banking on Google Diridon Station Development
Real estate investment has taken on some interesting dynamics in the Silicon Valley area, ever since Google announced plans to invest heavily in the area around Diridon Station, with a strategy to turn it into a major mixed-use development. Since that announcement, Google has been actively snapping up properties in the vicinity (to date around $350 million worth), to make way for the implementation. Urban Catalyst, a real estate investment fund focusing on Opportunity Zone investing across the region, is the most recent firm to enter the scene.
The San Jose, California-based company recently closed the purchase of two properties along West San Carlos Street near Josefa Street, near Dridon Station, with plans to complement the downtown redevelopment with a 170-room hotel.
“Transit-oriented development, like this hotel, allows us to be part of building a vibrant, livable and sustainable community,” said Urban Catalyst Founder Erik Hayden in a statement, as reported by CoStar. “Through these property purchases, we are making bold moves to revitalize the area by filling the demand for downtown hotels offering walkability and easy access to mass transit.”
In May, Urban Catalyst purchased roperty at 26 and 30 S. First St., which will also be redeveloped. This site is also an opportunity zone, which were created with the 2018 tax reform, in order to encourage development in economically challenged areas. Investors receive tax benefits in exchange for their long-term investment in qualified areas.
Urban Catalyst is just one of many developers committing resources to the downtown San Jose area, in anticipation of the implementation of Google’s plans. It’s expected to take 10-15 years to fully realize Google’s strategy, but when complete, San Jose could see a bump of an additional 6-8 million square feet of office, retail, restaurant, and residential space, plus complementary developments that have surged in recent months.
San Jose is starved for this space, as it has experienced no office development in the downtown area for over 10 years. That streak was recently broken by Adobe, as it begins work on its headquarters expansion at 333 W. San Fernando St.
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