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[Project Highrise]Real estate: Downtown San Jose mixed-use tower project lands financing

2021-9-8 source:AVA Game Community

  SAN JOSE — An unusual mixed-use tower in downtown San Jose is slated to begin construction by the end of the year after the project’s developers landed the funds they need to build the highrise.

  The San Jose highrise is expected to include a mix of offices, homes, and a restaurant or retail — which would be a development unique to the South Bay because these components would all be contained within a single tower.

  The tower would total 21 stories and would include several floors of offices and several floors of residences, according to San Jose-based Acquity Realty, the project’s developer.

  “We have raised all of the capital we need for the project,” said Dennis Randall, a principal executive with Acquity Realty. “We have our entire financing stack in place.”

  The tower, dubbed The Carlysle, is slated to be built at 51 Notre Dame Ave. at the corner of Carysle Street.

  The highrise is located in an opportunity zone where property investments can be undertaken with significant tax advantages.

  “We have our equity in place and our construction financing identified,” Randall said.

  The Carlysle project also has all of the necessary permits, including development, building, and demolition permits, that are needed for the tower to proceed.

  “We should be well under construction by the end of this year,” Randall said.

  One veteran expert familiar with the downtown San Jose market embraced the disclosure that the developers have the financing necessary to launch construction.

  “It’s great news,” said Mark Ritchie, president of Ritchie Commercial, a real estate firm. “It’s one thing to buy a property, design a project, and get the permits. It’s an entirely different level to get the money, start construction and build it.”

  Gathering area of The Carlysle, a mixed-use office, housing, and retail tower in downtown San Jose at 51 Notre Dame Ave., concept. // Steinberg Hart

  The project’s developers are also hoping to use the tower as an anchor to create an active corridor along West St. John Street that will help connect Google’s approved Downtown West transit-oriented neighborhood near the SAP Center and the Diridon train station with the bustling San Pedro Square area.

  “We see The Carlysle as the connective tissue between San Pedro Square and the SAP Center that will also connect Little Italy,” Randall said. “We can activate that whole area, including the block underneath the freeway.”

  A streetside active environment with pop-up shops, drinking establishments, and dining spots could sprout in this area.

  In this vicinity, besides Little Italy, the main establishments with any activity are Henry’s World Famous High-Life steakhouse, Paesano Ristorante Italiano, and Enoteca La Storia Downtown wine bar.

  “We could have some great outdoor activities added to this area,” Randall said.

  The Carlysle would include 12 floors of residential, five floors of offices, and four floors of parking as well as the ground-floor office and retail or restaurant spaces.

  Randall believes dining options at or next to the Carlysle tower could be flexible.

  “The Carlysle could become an extension of San Pedro Square,” Randall said. “The tower could accommodate outdoor dining. This could create another great dining and restaurant street in downtown San Jose.”

  In addition to the street-level activity, the developers intend to create an active area atop the tower.

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  “We want to have the first rooftop deck in San Jose,” Randall said. “We are building this as close to the height limits as we can get without going over them.”

  The tower would consist of 290 apartments and 158,000 square feet of office space.

  In a previous interview with this news organization, Erik Schoennauer, a land-use and property consultant who helped to steer the development proposal through the city planning process, said that a mix of all three development types improves the project’s chances of success.

  “By having office, housing, and retail in one highrise, the benefits are that you gain the relative strengths of each different use, and you mask the weaknesses of each use,” Schoennauer said. “That makes the tower in its totality feasible.”

  Street-level view of the Carlysle office, housing, and retail mixed-use tower in downtown San Jose near the corner of Carlysle Street and Notre Dame Avenue, concept. // Steinberg Hart

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