SAN JOSE — A housing highrise in downtown San Jose could replace an office tower project, a development that, whether commercial or residential, could sprout at one of the gateways to the city’s urban core.
In 2021, Westbank, a developer with a global reach, proposed an office highrise at 255 West Julian Street, a project proposed for a site next to the prominent Davidson Building in San Jose.
Canada-based Westbank calls the development Arbor. The Arbor tower is one of several projects that Westbank has proposed in downtown San Jose on sites the company owns.
The new proposal envisions a residential tower, documents on file with San Jose planners show.
The development site is near the interchange of State Route 87 and West Julian Street, according to property records. This location is deemed to be a key gateway to the northern edges of downtown San Jose.
“We are excited to have submitted an application for Arbor, a new majority residential development project, where we were fortunate to have another opportunity to collaborate on the design with the world-renowned Studio Gang,” said Andrew Jacobson, principal executive for Westbank’s U.S. operations.
Westbank is contemplating a mixed-use tower, primarily residential, that would be 18 stories high. The highrise would also include a commercial component, which might be ground-floor retail.
The project could include four levels of underground parking, Westbank’s request for a site development permit shows.
Westbank has proposed several projects in downtown San Jose. These include residential towers and office highrises.
The company also has launched a top-to-bottom revamp and renovation of the Bank of Italy historic tower at 12 South First Street in San Jose.
That project would convert the office spaces in the old tower into residences. Work began in earnest a few months ago on the conversion.
Westbank’s gambit to switch an office project to a residential proposal is hardly a surprise, considering the dire conditions for the vacancy-plagued Bay Area office sector.
Widening job cuts launched by tech companies are among the biggest factors in the office market’s woes.
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In 2022, 2023 and so far in 2024, tech companies have revealed plans to slash more than 45,000 jobs in the Bay Area.
Tech companies, in turn, have a greatly reduced appetite for office space since they have been trimming workers in the Bay Area.
A growing number of tenants are scrambling to sublease their offices as they retreat from those workplaces.
This has shoved office vacancy levels to record heights. The worst problems have erupted in San Francisco, where well over one-third of the office space is vacant.
Both downtown San Jose and downtown Oakland also suffer from brutally high vacancy rates, although not nearly to the grim extent in San Francisco.
Westbank’s new proposal for a housing tower at 255 West Julian is in the early stages of a review by San Jose city officials.
“We are currently going through the planning process and will continue to work closely with the city of San Jose to refine the project and complete the permitting process, so we can deliver new housing expediently,” Jacobson said.
