Boutique Hospitality Company at the Center of San Jose Tech Museum Place expansion

SAN FRANCISCO (March 8, 2017) — Kimpton Hotels & Restaurants announced today its first property in San Jose, California at Museum Place, a mixed-use development by Insight Realty Company that will also expand the Tech Museum of Innovation, slated to open in 2021.

Museum Place will include a four star 173-room Kimpton hotel, three-hundred residential units, retail, restaurants and will increase the size of the Tech Museum by 54,000 square feet. The development will also include 250,000 square feet of first-class creative office space designed to foster an open and collaborative environment among workers.

The new Kimpton hotel will include approximately 8,000 square feet of meeting space, a full service restaurant, a fast-casual Café, a sixth-floor bar and an outdoor pool and fitness center. The international design firm Steinberg was selected as the architect. The project will also improve an existing pedestrian promenade that connects Park Avenue to the San Jose Convention Center and VTA Light Rail station on San Carlos Ave.

Owned and developed by Insight Realty Company and its partner China New Era Group Corporation, this iconic project will be in the heart of downtown San Jose, just one block from the Convention Center, near SAP Center and close to major companies with nearby offices including Adobe, Cisco Systems, IBM and PayPal.

“Not only is San Jose the epicenter of the technology industry, it’s also a world class city and the ideal place for a Kimpton hotel and restaurant,” said Mike DeFrino, Kimpton Hotels & Restaurants’ CEO. “With professional sports, a state-of-the-art entertainment and a burgeoning downtown, the Museum Place project is the perfect venue for us to introduce our brand of heartfelt hospitality to the Silicon Valley. We’re delighted to partner with Insight Realty on this one-of-a-kind urban retreat.”

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The Registry

A 2.35-acre site at 180 Park Avenue in San Jose is situated right next to the Tech Museum of Innovation and has a proposal for a 1.16 million square foot mixed-used high-rise project. Last year, the City issued a Request for Proposals for a preferred developer as the project is a public-private venture. Insight Realty Company was chosen and brought on board Steinberg Architects and Level 10 Construction. China New Era Group Corporation is a financing partner for the initiative and Colliers International will take charge of property leasing.

“The City owns the land currently and the plan is to sell it to Insight,” explained Lea Simvoulakis, Planning project manager. “Part of the deal will be that a museum expansion be incorporated into the project. The General Plan has this site slated for a high density development, and with this proposal, there are a lot of goodies rolled into one.”
Parkside Hall, a 30,000 square foot conference and event facility currently exists on the site and will be demolished to make way for a 24-story building reaching 270 feet. Two floors will be connected to the Tech Museum to expand the Museum’s usable space by 60,000 square feet. The rest of the building will be devoted to 306 condos, 187 hotel rooms, 209,779 square feet of Class A office and 14,116 square feet of retail. Three levels of below-grade valet parking will provide 1,000 stalls for all users in the development and may potentially be operated with a mechanical lift system.

On December 1, an environmental scooping meeting was held with minimal attendance by community members and no significant feedback given. Because the high-rise is expected to cast a shadow on nearby Plaza de Cesar Chavez, a Subsequent EIR is being done by the City. Insight Realty and the City are currently in the process of finalizing the site development permit and are negotiating the final value for sale of the site. Dennis Randall, managing director at Insight Realty expects the whole process to be completed by Q1 2017. The disposition and development agreement will be decided upon by City Council while the site development agreement will go before a Planning Director’s hearing. Both meetings will likely occur in March.

“The feedback thus far has been overwhelmingly positive,” said Randall. “We’ve done a lot of outreach and been sensitive to architectural comments in order to make the project better. Building in San Jose is unique because of restrictive height limits and the very high water table, which causes significant engineering issues. For this project what we’ve done is maxed-out air space, earth space and efficiency, and chopped it up into feasible niches — hotels, condos, creative Class A office, Tech Museum space, retail and parking. It’s a model that we can replicate going forward in Downtown San Jose.”

Randall said that an announcement will be issued by the end of the year regarding the operator for the building’s four-star hotel. The hotel’s amenities such as a restaurant, bar and pool are geared to be accessible by all building users as well as the general public. The Class A office will be marked by large flexible floor plates and have access to a terraced outdoor space that has the double purpose of scaling back the building’s overall massing.

“For the design and development team this project fills a need for active pedestrian space in the area,” said Raquel Bito, senior design manager, Steinberg Architects. “We’ve focused on pedestrian access for Park Avenue and designed a paseo, which augments the retail component for the Tech Museum. There’s also a restaurant on the lower level operated by the hotel but is also a destination for the public. It will draw light rail commuters from West San Carlos Street and serve as a place where people can linger in the outdoor seating. We think this is a really special project in terms of its combination of users and the potential of what it can bring to this part of Park Avenue that currently has no retail.”

Silicon Valley Business Journal

The developers behind Museum Place — downtown San Jose’s most ambitious mixed-use tower — have submitted their first formal plans to the city, showing a revised design and a larger residential and hotel component.

“We basically super-sized everything,” said Dennis Randall, managing director for Insight Realty, which is spearheading the project with China New Era, a Chinese development and investment firm. “It’s a very progressive, very urban plan.”

The new look simplifies some of the sweeping sculptural elements and facade flourishes that Insight showed in a concept design first revealed nearly a year ago. That design helped Insight win a contest to gain control of the property from the city, which is offering up the land in return for a new exhibit hall for the Tech Museum of Innovation.

But the basic elements are there, including layers of landscaped terraces, extensive balconies, and a look and feel that appears different from all angles.

“The changes are all about design and constructability,” Randall said. “You have a lot of Title 24 issues, code requirements. The design we have now takes in all of that, but we are absolutely trying to maintain everything we proposed.”

The new plans include just about every real estate asset class you can imagine. That’s not so uncommon in Asia or major gateway cities like San Francisco or New York, but it’s unlike anything ever attempted in the South Bay. Yet Randall says Insight’s partner, China New Era, has the project fully funded and can start construction as soon as the approvals are received.

The new plans include:

  • 213,820 square feet of office space
  • 334 condo units (326,000 square feet)
  • 143-room hotel (69,224 square feet)
  • 12,171 square feet of retail
  • 60,000 square feet of expansion space for The Tech on the ground floor and one level underground.
  • Three levels of below-grade parking for 1,000 cars (which will be parked valet style, with cars stacked above each other).
The formal planning submission is important because it shows progress is being made on a project that was first announced a year ago. Despite the flashy drawings and prior news coverage, the firm hadn’t actually submitted a formal planning package. That’s now done.The documents show that Insight is working with a team that includes Level 10 Construction on pre-construction; Kier & Wright on civil engineering; Langan Treadwell Rollo on geotechnical engineering; Magnusson Klemencic Associates on structural engineering; the Guzzardo Partnership on landscape architecture; and Watry Designs on the parking program. The architect is Steinberg.The plans come as the city and Insight work toward a final “disposition and development agreement,” spelling out the deal between the city and the developer, that should be presented publicly in the late fall, Randall said. The process isn’t quick: “A lot of the DDA is dependent on technical inputs we don’t have yet,” he said. “We have to get information back on the costs to build.” The good news? The DDA process is being run concurrently with the planning process, so approval of the DDA should coincide with approval of the project.In the meantime, Insight is working to get the project in front of potential office tenants, hotel operators and condo marketers. A Colliers International team ofGregg von ThadenDon ReimannMike Rosendin and Susan Gregory have been hired to market the office space.“They’ve been instrumental in helping us get the office floors right,” Randall said, noting that the project will include large floor plates ranging from 60,000 square feet to 40,000. “And we have outstanding hotel candidates, all four star, and we’ve gotten great feedback on the condo concepts,” Randall said.

The Registry: Bay Area Real Estate

New York-based Synapse Development Group, a real estate investment and development firm, along with with its joint venture partner, the Kuwait real estate company AQARAT, acquired the nearly 43,000 square foot 944 Market Street property for $33,050,000, or roughly $768 per square foot, in an off-market transaction, according to public records. Union Labor Life Insurance Company provided a $21.7 million senior mortgage loan for the acquisition, which closed on June 2nd.

The eight-story mixed-used building is located in San Francisco’s Mid-Market neighborhood and is home to Hack Reactor, a developer school, along with a number of other service and technology-related companies. The historic building was developed in 1907, and designed by famed architect L.B. Dutton.

944 Market provides 5,300 square foot floor plates with open ceilings, exposed brick and operable windows along two street frontages providing abundant natural light. The ground floor retail suites provide 18 foot ceiling heights and Market Street frontage directly across from the new Nordstrom RACK and the proposed Market Street Place, a 250,000 square foot multi-story retail development, according to a report by Insight Realty Company.

When contacted, the buyers declined comment through a representative.

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by Ben van der Meer
Sacramento Business Journal

A real estate investment firm from San Jose has made its first entry into the Sacramento market by buying a five-story office building in Point West.

Insight Realty Co. closed escrow last week on the 155,000-square-foot building at 2180 Harvard St. Dennis Randall, a partner with Insight, said his company felt it was the right time to look at secondary markets like Sacramento rather than primary markets like Silicon Valley.

“Our belief is the market is maturing here,” he said. “We think institutional investors are going to start looking at secondary markets and value them more appropriately.”

The Harvard St. office is about 90 percent leased now. But Randall said the building will be rebranded as “Harvard Square” as part of an effort to re-lease about 45,000 square feet of expected vacant space from expiring leases. “Basic blocking and tackling on leasing up,” he said.

Randall said he was encouraged when his firm polled current tenants and found unanimous support for new ownership and marketing.

“We’ll be more aggressive about marketing,” he said.

Insight is not stopping with one purchase. Randall said his firm is in negotiations to buy a second asset in the Sacramento region, though he did not provide further details.

According to public records, a limited partnership in Newport Beach previously owned the building. The sales price was not available. Insight worked with local developer Patrick Molloy and his firm Gavden Investments to buy the building.

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by Nathan Donato-Weinstein
Silicon Valley Business Journal

Drive down Park Avenue in downtown San Jose, and you might miss Parkside Hall if you so much as blink.

But the aging exhibit space for The Tech museum could be transformed into a sleek mixed-use tower if all goes well between the city and a Chinese-backed real estate developer with an ambitious vision — and, city officials hope, rock-solid financial support.

The San Jose City Council on Tuesday formally agreed to enter into talks with Insight King Wah, a joint venture of Insight Realty and King Wah Development, to acquire the city-owned site. The partnership is being backed in the deal by China New Era, a global real estate investor, for the $250 million project.

“There’s a vibe that this may be one of the best developments that our downtown has seen,” said downtown councilman Raul Peralez. “I’m really excited about this project and what it could mean for downtown, our city and for The Tech.”

The unanimous vote was largely expected after city staff in August recommended the Insight proposal from four hopefuls: Insight, Build Inc., Simeon, and a group called 180 Park Avenue LLC. I wrote about that selectionhere.

Insight is proposing replacing the building at 180 Park Avenue with a 270-foot-tall tower. It would include 210,000 square feet of office on five floors; 185 residential units on 12 floors; two stories for a nationally branded boutique hotel; and “luxury penthouse residences“ up to 11,300 square feet on the top floor.

The city would contribute the land and Insight would agree to build a new, expanded exhibit space for The Tech as part of the building.

Mayor Sam Liccardo was largely supportive of the project at Tuesday’s council meeting, but asked for assurances that the Insight venture could pull off such an ambitious project.

“In basketball parlance, we’d call this a quadruple bank shot,” Liccardo said. “You’re trying to make residential, office, hotel, retail work, plus space for The Tech. Undoubtedly, you’ve heard critics say you can’t finance it. … So my question is, can you finance it?”

Dennis Randall, a managing partner for San Jose-based Insight, answered in the affirmative.

“Raising capital for a project like this, in a town like San Jose, is, I don’t think, a problem anymore,” he said.

Randall said that capital used to be focused on specific asset classes — such as office-only or retail-only projects — but that’s changing. In any event, the joint venture already has a committed financial partner in China New Era.

As part of the agreement to enter into negotiations with the city, Insight agreed to a “labor peace agreement” in which the future hotel operator would agree not to resist a union’s organizing attempts.

The next step is to work through the financial terms of a deal. Officials hope to bring a purchase and sale agreement to the council for approval within six months.

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