Hines filed an initial proposal to build nearly 404,000 square feet of industrial space on almost 30 acres of land it recently acquired from iPhone maker Foxconn.
The project would be one of the largest of its kind in San Jose and represents another sign of growing investor interest in the southern part of the city, where Duke Realty recently acquired about 15 acres of vacant land for $40.2 million and is seeking entitlements to build an almost 303,000-square-foot industrial building on a different property it owns there.
If approved and completed, that amount of new space would also add some breathing room to San Jose’s tight industrial market, where the vacancy rate was 2.6 percent at the end of the third quarter, according to data from Colliers, a commercial brokerage firm.
Houston-based Hines filed a preliminary review application with the city on Oct. 5 for a two-building project at 550 Piercy Road in South San Jose. The larger of the two structures borders Piercy Road to the north and totals 238,680 square feet; the other borders Hellyer Avenue, the site’s southern edge, and contains 165,213 square feet, according to a copy of Hines’ plans, which the city’s planning department does not consider to be a formal development application.
The approximately 29.6-acre site is currently vacant and made up of two lots that Hines aims to merge.
The real estate investment firm’s two planned buildings there, both of which would have 36-foot clear heights, would be used for potential industrial distribution, manufacturing and research and development, according to a copy of its proposal. Those uses are compatible with the site’s Industrial Park zoning designation. Designed by Ware Malcomb, the project involves around-the-clock hours of operation and would have 333 parking stalls for cars and 80 trailer stalls, Hines’ proposal said.
Representatives for Hines did not respond to emails seeking comment. Land-use consultant Erik Schoennauer of The Schoennauer Company, Hines’ representative for its Piercy Road development, said his client asked him to decline to comment.
On Sept. 6, Hines, through an affiliate called Hines Acquisitions LLC, bought the land at 550 Piercy Road for $62.25 million, or about $48 a square foot, from Foxconn Asset Management LLC, a subsidiary of iPhone maker Foxconn. The seller — also known as Hon Hai Precision Industry Co., Ltd. — disclosed the terms of the transaction in a Sept. 6 announcement. It projected a pre-tax profit of almost $50.5 million through the sale.
As of Oct. 8, the deal had not been recorded in the Santa Clara County Clerk-Recorder’s Office. Representatives for Foxconn did not respond to requests for comment. As for Hines, its early-stage plans for its Piercy Road project are under city review.