by Nathan Donato-Weinstein
Silicon Valley Business Journal
Thousands of motorists every day whiz by the 10.6-acre parcel of bare land just off Highway 87 at the edge of downtown San Jose. But it has long been overlooked as a development site.
Not anymore. Last week, Insight Realty Co. acquired the brush-covered site from longtime owner Union Pacific Railroad. Its vision: An ambitious combination of “creative office” and apartments that Insight managing director Dennis Randall says will create a balanced ecosystem of jobs and residents in a riverfront setting. Working title? Railyard Place.
“We want this to be a walkable, pedestrian urban village,” Randall said in an interview. “This is not a car project. It’s a people project.”
Insight paid about $7.75 million, or just under $17 per square foot, for the land, public records show. That’s a relative bargain for more than 10 acres in the heart of Silicon Valley, but the price also reflects some risk. The land is unentitled, and the project will need approvals that are not guaranteed.
Perhaps more significant for the market, however, is Insight’s bold bet that downtown is ready to expand over the freeway.
“What they’re doing is testing the ability of the city to jump the freeway,” said Mark Ritchie of Ritchie Commercial, which specializes in the downtown office market. “The freeway is a murderous barricade. But downtown is so small, it can be doubled by jumping the freeway, provided that the tenant base will do so.”
Insight has yet to submit a formal proposal to the city, but Randall said the concept is to build about 240,000 square feet of office closest to the freeway, complemented by about 650 apartment units fronting the Guadalupe River trail. Retail would also be in the mix.