WSC Developments Pivots to Apartments in San Jose Project

WSC Developments has updated plans to build a 213-unit housing complex in San Jose after jettisoning a hotel project in the wake of plunging demand.

The Monte Sereno-based limited liability company led by Thanh Nguyen, Dylan Nguyen and Margaret Pham has filed revised plans to build the seven-story building at 1470-1472 West San Carlos Street in Buena Vista, Mercury News reported.

The project updates a proposal from July to construct 180 condominiums above 1,700 square feet of shops, restaurants or offices on the ground floor. It’s not clear why the developer ditched plans for for-sale units for rental apartments.

A hotel was once envisioned for the nearly one-acre site at West San Carlos and Willard Avenue, but was scrapped because of a downturn in the lodging sector.

The revised project would include 155 one-bedroom apartments and 58 two-bedroom apartments, with 11 units – or 5 percent – set aside as affordable. The white, charcoal and rust-colored building has expansive windows and steel balconies, according to a rendering.

The Schoennauer Company, a locally based land-use and planning consultancy, is assisting with entitlements for the project. City staffers were expected to give final approval this week, according to Mercury News.

The Bay Area hotel market has been in a years-long slump as failed loans, plunging values and foreclosures have hammered the region’s hospitality sector.

In the years leading up to the Covid-19 pandemic, the hotel sector had surged as the health of the tech industry kept investors and lenders bullish on the Bay Area, where Silicon Valley and San Francisco were hotspots for large conferences and corporate meetings.

That made the pandemic-era lodging nosedive all the more dramatic. Despite signs of healing, San Francisco, Silicon Valley and the East Bay haven’t fully recovered.

In the last couple of months, a wave of defaults, foreclosures and sales battered the region’s hotel industry as loans taken out between 2018 and 2021 are maturing amid high interest rates, inflated costs and lower revenue.

– Dana Bartholomew