Urban Community Pauses on San Jose Towers After Nabr Exits

Urban Community has paused development of three towers that would contain 500 homes in Downtown San Jose after its development partner, tech start-up Nabr, walked away from the project.

The San Jose-based developer has put on hold its trio of residential highrises at 420 South Second Street and 420 South Third Street in SoFa after the New York-based rent-to-own platform quit, the San Jose Mercury News reported.

The move comes months after Nabr, which uses software to allow tenants to customize and design their homes with financing packages for potential ownership, had signed up 4,000 would-be buyers.

After Nabr pulled out of the project, it returned all of the deposits, or $1,000 refundable reservation fees, according to the Mercury News.

The tech startup, which last August had raised $48 million in a venture financing round, has decided to abandon the San Jose market.

“Nabr is doing a pivot and is looking at markets other than San Jose,” Gary Dillabough, a principal executive with Urban Community, told the Mercury News. “They are looking at markets that are growing more quickly. Nabr wants markets that have a lot more demand.

“We are still going to do residential in all three towers,” Dillabough added.

The three towers lined with “smart windows,” and generous balconies with two-story-tall trees would make an impact on San Jose’s trendy South First Area district.

Plans call for two towers at South Second and East San Salvador streets, one containing 169 rent-to-own apartments and another with 137 rent-to-own units. A third tower at South Third, between East San Salvador and East William streets, would have 168 rent-to-own units.

Dillabough said he’s considering various options, including rental units and some for-sale condominiums.

“There is still demand for housing,” Dillabough told the newspaper. “It will be a few months” before development can get back on track.

Nabr was launched in 2021 by Roni Bahar, a former WeWork executive; Nick Chim, co-founder of Flux, a spinout of the secret Google X laboratory; and Bjarke Ingels, founder of Bjarke Ingels Group, an architecture firm based in Denmark that designed the three San Jose towers and Google’s North Bayshore campus in Mountain View.

— Dana Bartholomew