Another planned office development in the Bay Area is pivoting to housing as demand for office space lags.
Vancouver, Canada-based developer Westbank has revised its plans for a development in downtown San Jose, The Mercury News reported. The new proposal, submitted to the city’s Planning Department, calls for 391 housing units next to a data center at 180 Park Avenue as part of Westbank’s Park Habitat development.
The housing would rise next to The Tech Interactive museum on a site previously set aside for an office tower. The plan is the latest iteration of proposals from Westbank over the past year that call for the construction of apartments and a data center in downtown San Jose.
“Our entire San Jose initiative is based on the premise that the best placement for housing is in central urban locations that are walkable and offer proximity to amenities, transit and workplaces,” Andrew Jacobson, vice president of the U.S. for Westbank, told The Mercury News. “Park Habitat aligns perfectly with that strategy… We’re building on the idea that great cities don’t have business districts or residential districts; rather they are all intermixed.”
With the increased strain on the power grid that artificial intelligence and other new technologies bring, Pacific Gas & Electric is looking to upgrade its electricity systems in San Jose and other parts of the Bay Area. Westbank’s data center would capture the waste heat from the facility to provide low-cost, low-carbon energy to nearby residents, Jacobson said.
Elsewhere in San Jose, last August, Westbank swapped out an approved plan for a 14-story office building at 255 West Julian Street in downtown San Jose for an 18-story residential tower. Soon thereafter, it revised plans submitted in 2022 to switch from a 750,000-square-foot tower at 35 South 2nd Street with 194 apartments and 368,000 square feet of offices to 768 housing units and 10,700 square feet of ground-floor retail.
Other Bay Area projects to replace offices with housing include a planned redevelopment at Bishop Ranch in San Ramon, a Trammell Crow-led project in Walnut Creek, and Align Real Estate’s plans to turn offices into homes in Livermore.
Office vacancy in downtown San Jose was 28.9 percent in the second quarter, according to Cushman & Wakefield’s Q2 report.
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