Hanover Company has landed a $120.4 million construction financing to build 1,140 apartments atop a historic persimmon orchard in north San Jose.
An affiliate of the Houston-based developer secured the loan from JPMorgan Chase to redevelop the Tsukuda Fruit Stand and orchard at 2620 Seely Avenue, the San Jose Mercury News reported.
Hanover bought the 118-year-old, 22.2-acre orchard this month from the Sakauye family for $78.3 million, or $3.5 million per acre.
It then sold seven acres to SummerHill, the San Ramon homebuilding division of Marcus & Millichap, based in Calabasas, for $73.6 million, or $10.5 million an acre.
Hannover plans to replace the orchard with 1,472 homes, 19,000 square feet of shops and restaurants and a 2.5-acre public park.
Its immediate plans call for a 397-unit apartment complex with 6,500 square feet of ground-floor retail.
The six-story complex, designed by Irvine-based KTGY Architecture + Planning at Montague Expressway and Seely Avenue, is clad in gray and white, with floor-to-ceiling windows and inset and exterior balconies, according to a rendering.
Erik Schoennauer, partner at Schoennauer Company, a land-use consultant for the project, said the orchard project will comprise 1,140 apartments developed by Hanover, including 57 affordable units; 178 affordable units by The Pacific Companies, based in Idaho; and 154 townhomes by SummerHill.
The Sakauye Farm site at 2620 Seely Avenue will be preserved, its farmhouse moved to History Park in San Jose, according to Schoennauer. Its developers have already begun to grade the property, located within one of the Bay Area’s largest tech hubs.
The Tsukuda Fruit Stand was among San Jose’s last farms in the Santa Clara Valley to be replaced with housing or offices. The property, acquired by the Sakauye family in 1907, had persimmon trees and berries from when the area was called the “Valley of Heart’s Delight.”
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Hanover, SummerHill eye 1,600 homes in north San Jose