Bay Area Office Project Gets Green Light

Davidson Building

San Jose–based developer Urban Community and Westbank Corp., of Vancouver, have received city approval to move ahead with The Arbor, their two-building office project in San Jose, the Silicon Valley Business Journal reported.

The Arbor will consist of a new mass timber structure adjoining and connected by a skybridge to an adaptive reuse of the existing Davidson Building, at 255 W. Julian St., totaling between them more than 500,000 square feet of office space. The new building will replace a parking lot just north of the Davidson Building.

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The new structure will have 452,000 square feet of office space, as well as 13,000 square feet of ground-floor retail space, all atop four levels of underground parking. The developers also plan to include 35,000 square feet of terraces and a rooftop garden.

The Davidson building is a six-story, 56,000-square-foot structure completed in 1984. The renovation will add 17,000 square feet of outdoor patios, balconies and a rooftop garden, as well as a 6,000-square-foot food hall on the first floor.

The roughly 5-acre site is adjacent to the Guadalupe Freeway/California Route 87, more or less at the northern edge of downtown San Jose.

The architect for the project is Studio Gang, of Chicago and San Francisco.

Development despite pandemic

Central San Jose is doing fine for office development right now, and the 800-pound-gorilla is Adobe’s North Tower. The nearly 1.3-million-square-foot project at 333 W. San Fernando St. is slated for completion by next summer. The building is designed to be all-electric and to achieve LEED Gold certification.

In addition, the Jay Paul Co. is underway with a speculative 879,000-square-foot office project, CityView Plaza, at 200 Park Ave. It’s scheduled to deliver by the third quarter of 2023.

Silicon Valley has 6.5 million square feet of office space under construction, which contrasts with a 12.9 percent direct and sublease vacancy, according to a third-quarter report from Avison Young. The sublease office market alone is at a record high of 3.1 million square feet.

Despite that, AY says, “Demand is continuing to increase as the economy reopens and tenants that postponed their long-term occupancy strategies re-enter the market.”

One very favorable factor is the region’s 73.7 percent vaccination rate, which well exceeds the U.S. average of 55 percent, also according to Avison Young.