North San Jose: Up Close and In Depth

For decades, North San Jose has been a no-brainer for companies needing large footprints, heavy-duty lab capability and access to a Bay Area-wide workforce.

Now, city planners and developers are working on upgrades to add more pizazz to the city’s largest employment hub.

Retail and amenities? New transportation options? Coming. Additional housing? Stay tuned.

In this blog post, I’ll share some updates on efforts to continue improving North San Jose as a premier corporate address, as well as development progress and additional tidbits I hope you’ll find useful.

Samsung Campus, North San Jose

“North San Jose is home to 90,000 jobs, more than twice as much as any other submarket in the city,” said Chris Burton, deputy director for business and economic development in San Jose’s Office of Economic Development. “Maintaining North San Jose as a premiere address for business is a huge focus for everyone at City Hall, which is why we’re focusing on attracting and delivering new retail and amenities.”

Policy Changes to Encourage Retail
Lat year, the City Council  signed off on a new North San Jose Retail and Amenity Strategy to help facilitate more community- and employment-serving uses in the district. One key outcome: A tweak to San Jose’s Municipal Code that removes some regulatory barriers to developing retail and amenities in Industrial Park (IP)-zoned sites. (Much of North San Jose is zoned IP.)

The change allows retail pad buildings to be developed away from the primary employment building. That’s key, because retail uses previously had to be integrated into office/R&D buildings and faced a 10-percent (of total building area) size limit. Now property owners have more flexibility in adding retail uses to their sites.

Given the size of many office parks in North San Jose, Burton thinks there’s significant potential here – whether it’s temporary containerized retail, pop-up activations, small pad buildings or more ambitious developments.

Moitozo Park, North San Jose

It’s also important for new residents who have moved into North San Jose. Since 2013, about 8,000 apartment homes have been constructed as part of the first phase of the North San Jose Policy’s residential framework. That residential boost included some significant ground-floor commercial space, which is now largely filled with some great restaurants, like Lalla Grill and Saladfarm, as well as services like Corepower Yoga. But San Jose economic development officials realize more is needed.

A North San Jose retail study includes a deep-dive report, prepared by Strategic Economics, that analyzes the realistic retail demand and potential in this part of the city. Real estate professionals will find a wealth of useful data in the report that sheds light on employment densities, demographics, opportunity sites, traffic volume and retail needs.

Getting Around by Bike and BART
One of the report’s recommendations – to implement a bike-share program – recently debuted. On June 13, Ford GoBike launched a dockless bike share pilot with about 200 bikes in the North San Jose area. Access is flexible and cost-effective, starting at $2 per ride. Motivate, the company that runs GoBike (which was recently purchased by Lyft), has all the information you need to get started on its website.

Speaking of getting around, you’ve probably already heard that BART will be opening its first South Bay stations – in Milpitas and San Jose’s Berryessa district – in late 2019. If you’re like me, you’re wondering how employees might be able to use the new extension as a commute option. A couple of things to keep in mind:

  • For North San Jose, employers and employees will probably want to study connections from the Milpitas BART station because of its proximity and light rail connection. The station features a direct connection with light rail, thanks to a pedestrian overcrossing that means riders don’t have to cross the street.
  • Under the “Next Network” plan, VTA is planning to roll out a number of “last-mile” solutions – timed with the launch of BART –to help commuters coming into the area. New bus and beefed-up light rail service and frequency are planned, though that plan could change before it is rolled out.
  • The station was also purpose-built with extended loading areas to easily service corporate shuttle programs as well as ride-share options.
  • ACE (Altamont Commuter Express) and Amtrak’s Capitol Corridor both stop near Levi’s Stadium as well as at the Downtown Diridon station, providing regional connections to the North San Jose area.

Questions from companies or brokers interested in taking advantage of transit in North San Jose can reach out to VTA’s market development department.

“AgTech” features in the soon-to-be-opened The Assembly Phase 1.

Development Progress
Within the last couple of quarters, a number of new projects reached completion: Steelwave’s America Center added about 457,000 SF of sleek new Bayside office space (half of which was quickly snapped up by Hewlett Packard Enterprise); Peery Arrillaga’s 116,800 SF 60 E. Brokaw also debuted; and Lincoln Property’s 415,000-square-foot I3@NorthFirst is complete. Partly because of the additional space coming on line, our vacancy rate ticked up in the first half of 2018, but brokerages are tracking a number of sizeable requirements that could land in the second half of this year. Also, a number of major renovations are under way, including SKS’s Assembly at North First, which should lure tenants seeking a unique workplace environment.

While we’ve seen some occupancy loss because of industry consolidations, there are also signs that the trend is shifting back to growth. In addition to HPE, tenants reported to be signing recent deals in North San Jose include Spaces, the hip coworking space; Bloom Energy; 8×8; Fetch Robotics; Calix; and Megachips. Arlo (the smart-home spinoff of Netgear) and Nio (the red-hot electric car company) also signed on for expansions recently.

Similarly, on the housing front, progress is afoot. The City Council prioritized opening additional housing capacity in North San Jose, as addressed in the North San Jose Policy. Staff is identifying a path forward to adjust the phasing in the Policy and make additional units available for construction, but implementation is still several months away.

Several new hotel projects are also going to add to North San Jose’s vibrancy and support the business ecosystem. A 355-room Hyatt House/Hyatt Place will be opening within months at 2013 N. First St. Across the street, a 284-room Hampton Inn/Holiday Inn Express is also under construction.

Rendering of The Station’s iconic entrance on N. First Street

Room to Grow
But there’s no doubt that North San Jose could be much more: As we detailed in our proposal for Amazon’s HQ2, the district offers among the largest expansion plays in the Bay Area. Projects like Boston Properties’ The Station on North First offer something you just can’t get anywhere else: big-campus setting; transit access; nearby housing and on-site retail possibilities.

To find out how North San Jose can meet your site-selection needs, feel free to give us a shout: