Urban Catalyst tweaked its plans for an eight-story residential building at 313 Gifford Avenue, pivoting away from senior housing, the Mercury News reported.
The San Jose-based developer is planning to develop 277 market-rate apartments instead.
It’s the latest move in the downtown San Jose market for Urban Catalyst.
In August, an affiliate of the developer secured a $112.5 million construction loan for a 278-unit apartment complex at the corner of West San Carlos Street and Josefa Street. Also over the summer, the company considered moving away from two market-rate high-rises in downtown San Jose amid questions about investor interest.
Besides multifamily, Urban Catalyst opened an eight-story, 176-room Marriott TownePlace Suites hotel at 495 West San Carlos Street in the spring.
The firm’s latest move toward market-rate is out of financial necessity, Founder and Managing Partner Erik Hayden said.
“The type of housing that is viable for getting financing is primarily market-rate multifamily apartments,” Hayden said. “It would be better for the community and our investors to build something sooner rather than later.”
Obtaining financing for senior housing, student housing and affordable housing is often more of a challenge.
Some developers are wary of housing altogether in San Jose.
Arena Investors affiliate Arena Limited, for example, submitted a proposal to turn the 199 Bassett Street building in downtown San Jose into an artificial intelligence-focused tech complex.
That site was previously planned to host a co-living housing project that would have brought 803 affordable units to the area, but the development fell through when former owner and developer Starcity defaulted on a $14.7 million loan secured by the site in 2021.
San Jose’s multifamily market is enjoying strong demand and price variability across asset types. Affordable‑housing complexes have sold recently for $300,000 to $400,000, while luxury assets command more like $700,000 per unit. City incentives, including tax waivers and fee reductions, are being deployed to spur construction and address the shortfall in market‑rate multifamily supply.
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