This Silicon Valley hub is looking at the biggest office conversion project in the Bay Area
By Laura Waxmann | San Francisco Chronicle | PUBLISHED: March 20, 2025
When the developer of a 3.4 million-square-foot office and retail campus planned in downtown San Jose pressed pause on the project last year due to tough market conditions, the delay was expected to last for years.
But, now, an office-to-housing conversion plan fueled by a list of concessions from the city could jump-start construction at the site.
This week, developer Jay Paul Co. led plans with the city to convert four existing office buildings at the site of the planned CityView Plaza project — located at the northeast corner of Almaden Boulevard and Park Avenue — into 320 homes.
In addition, a 293-foot residential high-rise is planned down the line as part of the project’s second phase. Taken together, the project’s residential component will bring 680 new homes to the area.
“This will be one of the largest commercial to residential conversions in the country,” San Jose Mayor Matt Mahan told the Chronicle. “As far as we can tell, it is the largest in the Bay Area and probably in the top five in the nation.”
The developer’s original plan, approved in 2020, was to demolish the aging office buildings and redevelop them into a new three-tower office park that would lure Silicon Valley’s tech giants to the area. The towers were expected to open by 2026.
Developer Jay Paul Co. asked San Jose city planners for a five-year extension of CityView Plaza’s entitlements last year, given waning demand for office space due to many of the Bay Area’s tech rms and largest employers pivoting to remote work in the wake of the pandemic.
According to a statement from the developer on Thursday, the buildings that are now earmarked for conversion into housing will undergo “comprehensive seismic and core system upgrades, including mechanical, electrical, and plumbing to ensure an exceptional residential experience.” The adaptive reuse project was designed by Solomon Cordwell Buenz architects.
The project’s initial phase will also include a 35,000-square-foot retail and restaurant component, known as the shops at CityView, and the modernization of 150 Almaden, a 15-story office tower at the site.
Once the adaptive reuse project wraps up, the project’s second phase contemplates a 360-unit, 27-story luxury housing tower at 121 S. Market St.
“The intersection of Park Avenue and Almaden Boulevard in downtown San Jose is set to be the most dynamic intersection in Silicon Valley,” Jay Paul, president of Jay Paul Co., said. “Downtown is evolving into a powerhouse of innovation, culture and commerce, and we’re excited to be part of that.”
The developer recently completed a nearby office tower at 200 Park. The headquarters for Adobe World and the City Center for Performing Arts are located across the street at 345 Park and 255 S. Almaden, respectively. These projects are estimated to support over 11,500 employees.
Paul said that demand for older Class B and C office space at the CityView project site has declined, while the “need for housing in San Jose continues to grow.”
“Right now, multifamily development is delivering stronger returns than aging office properties, making residential conversion an attractive proposition,” he said.
City officials worked closely with Jay Paul Co. on the modifications of the CityView Plaza project and sanctioned a number of incentives that are expected to help it break ground “soon and quickly,” said San Jose’s director of economic development, Nanci Klein.
She said that the developer was granted a “high-rise incentive” that eliminates the city’s requirement for adorable housing for the planned residential tower. The city also reduced a development fee used to fund parks, and halved “construction taxes” that the project would have been subject to, according to Klein.
“Residential in downtown makes sense,” Klein said. “We have hoped for at least another 10,000 units, and we were on our way to getting that.”
Mahan said that the city’s downtown has seen a “resurgence” in recent years that’s been largely driven by dining, shopping and entertainment. He said that weekday foot trac during business hours is at about 85% of pre-pandemic levels.
But housing remains a critical need in Silicon Valley. The CityView Plaza project offers an “incredible opportunity to deliver on this office-to-residential conversion that was much hyped as the pandemic started,” Mahan said.
In San Francisco, where downtown office vacancy was recorded at 36.6% in the first quarter of the year, office-to-housing conversion plans have been pitched but, so far, have failed to launch, with developers citing the high costs of adaptive reuse projects, combined with weakened rental rates, as a major barrier.
Mahan said a development fee used to fund San Jose’s parks charged housing developers about $60,000 per unit.
“If we’re truly committed to building more housing, we have to rightsize our requirements and our fees, and so we’ve dramatically pulled back,” said Mahan. “We can’t build the level of housing we need if we try to solve every other societal problem through taxes placed on new housing — there is a trade-o there. And I know nobody likes to make trade-offs, but we have to decide, do we want the building on the ground and the new housing and the new residents, or not?”
Full article: https://www.sfchronicle.com/realestate/article/housing-office-conversion-san-jose-20232207.php