Big retail center planned for south San Jose to include a Target
Silicon Valley Mercury News,
Thursday, March 08, 2012
Target is expected to be the primary anchor for a new shopping center that will rise near the Kaiser hospital in South San Jose.
The new retail complex, dubbed Village Oaks, will total 320,000 square feet. Besides Target, a major supermarket is expected to be one of the anchors. A health club, restaurants, banking and other retail are expected to make up much of the remainder of the tenants.
After stalling during the recession, the center's launch is being bolstered by a rebounding local economy. Principal developer Hunter Storm Properties has teamed up with realty finance and investment firm Pacific Coast Capital Partners.
"We have very strong interest in most retail categories for this site," said.
Curtis Leigh, director of development with Hunter Storm. "We are looking at two or three anchors, and have interest from multiple retailers for each anchor site."
The location of the retail complex, near Highway 85 and Cottle Road, is in a retail void for large shopping centers.
"This area is really underserved for retail," said James Chung, a partner with Terranomics, a real estate firm that is scouting for tenants to occupy the project.
The developers and Terranomics wouldn't identify the anchors that have agreed to move to the center, which will occupy a portion of the former IBM disk drive factory site.
However, marketing materials for the complex and a residential development that will be constructed nearby both identify Target as the primary anchor.
The nearest Target stores are at San Jose's The Plant shopping center and on East Capitol Exopressway off Highway 101 to the north, Oakridge mall to the west and a shopping center in Morgan Hill near 101 and Cochrane Road.
The robust job market in the South Bay has helped coax considerable interest out of big retailers for this center and elsewhere in Silicon Valley.
Target, for example, recently opened a store in North San Jose near Highway 237 and North First Street. And Target will anchor a new shopping center in Santa Clara called Main Street Santa Clara, said David Taxin, a partner with Meacham/Oppenheimer, a commercial real estate firm.
Wal-Mart Stores is opening at least four Neighborhood Market grocery stores in the Bay Area, including at San Jose's Westgate Mall, along with markets in Hayward, Pleasanton and San Ramon.
"National tenants are very bullish on expansion in the South Bay, especially in San Jose," Taxin said. "Developers of these projects know that these tenants are out looking."
Construction of the Village Oaks center should begin by year's end, the developers said. It could be completed by late 2013.
The builders of the retail complex touted the demographics of the region. The average household income in the area ranges from $95,000 to $104,000, the developers said. The median household income for all of Santa Clara County is $86,850.
The developers also said they believe the center can be a success even if no new residential development occurs in the area.
"There is tenant demand for the space today, without relying on future rooftops," said Jim Galovan, a Pacific Coast Capital vice president.
In 2011, the South Bay job market grew by 3 percent, tying the region with Houston as the nation's most robust.
"Santa Clara County's economy is very healthy," Chung said. "All signs are pointing in the right direction."