Urban Catalyst Buys Final Parcel for $600M San Jose Project

Urban Catalyst has paid $3.3 million for a parking lot in Downtown San Jose needed to build two apartment towers near City Hall.

The locally based developer bought the 26-slot lot at 60 North Third Street, the Silicon Valley Business Journal reported. The seller was Town Park Towers, which runs a senior living center next door.

The parking lot that runs along North Fourth Street across from the Miro apartment towers is the last parcel needed to build Urban Catalyst’s Icon office and Echo apartment project. Broker Mark Ritchie of Ritchie Commercial represented Urban Catalyst on the parking lot deal.

The $600 million Icon/Echo project was approved in November for a 24-story, 525,000-square-foot office building and a 27-story, 415-unit apartment highrise on 2.1 acres.

Last month, Urban Catalyst Managing Partner Erik Hayden said he may turn the Icon offices into a 22-story, 650-unit apartment building, citing a lack of demand for offices. “There are no office tenants available right now,” Hayden said at a real estate industry event.

Urban Catalyst now has four contiguous parcels on North Fourth Street that stretch half a city block. Plans call for razing a gas station, church, surface parking and three small commercial buildings.

The deal comes after the developer bought the three commercial buildings last year at 77 North Fourth for $9.5 million. Last year, it also bought the site of the former First Presbyterian Church at 49 North Fourth for $16 million. In 2019, it bought a Chevron station at 147 East Santa Clara Street for $15.9 million, according to the Business Journal.

The Icon and Echo Towers, designed by San Francisco-based WRNS Studios, look like two stacks of clear Lego blocks. The offices would be clad in floor-to-ceiling windows, while the apartments would include vertical window panels.

Higher interest rates and soaring construction and labor costs, however, have curtailed home building across the Bay Area’s largest city, according to a report this month. Developers didn’t break ground on any market-rate apartment project in Silicon Valley from January through June, according to CoStar.

Last week, multifamily developers, owners and investors from across the Bay Area at a Marcus & Millichap NorCal Multifamily Forum said they weren’t sure when the apartment market would recover, according to a report by The Real Deal.

— Dana Bartholomew