Westbank, Urban Community get OK for San Jose offices

Westbank and Urban Community have received planning approval for the joint venture’s single largest project of the eight they’re looking to bring to downtown San Jose, totaling more than 1 million square feet of office and retail space.

The project, named Orchard Workspace, takes up most of a downtown block bounded by 1st, 2nd, East San Carlos and East San Salvador streets in the SoFA District, an arts and entertainment neighborhood. Plans call for demolishing the existing 2.8-acre site — a 58,000-square-foot office building, a parking kiosk and a surface parking lot — and building a pair of 20-story towers connected by a five-level podium.

Orchard’s ground floor would contain its entire, 60,000-square-foot retail component, split almost evenly between space for three shops and restaurants and a market hall intended to emulate European street markets, plans show. The rest of the project’s rentable area is offices, which total more than 1.3 million square feet. Parking is provided through an underground garage with about 1,200 spaces for cars.

Westbank plans to share further updates on Orchard in the coming months, the company’s development team said in a statement. San Jose’s planning director approved the project during a Sept. 28 hearing. A Westbank spokesperson said it was too soon to answer questions related to construction.

Due to its size, Orchard is unlike any office project previously approved for SoFA, the site of numerous performing arts centers, galleries and museums. One of them, the 1920s-era California Theatre, is across the street from the project and would be connected to it through a new public plaza. The neighborhood’s collection of small to mid-sized office buildings caters to tech startups and professional services firms.

Surrounding the Orchard site is The Sobrato Organization’s 482,000-square-foot office project that the city approved last spring, Westbank and Urban Community’s 540-unit apartment high-rise that’s under review, and Urban Community and Terrascape Ventures’ 255-unit project across two buildings.

Currently Westbank and San Jose’s Urban Community are constructing two other projects downtown. The pair broke ground in April on a 20-story spec office structure slated for completion in 2025, and they’re working on a top-to-bottom renovation of the historic Bank of Italy building set to wrap up next year. Only two other developers, Jay Paul Company and Boston Properties, are building spec office projects downtown, where the office vacancy rate is nearly 19 percent, according to the latest Newmark data.

Separately, Westbank and Urban Community have commissioned Cushman & Wakefield to raise $1.5 billion in capital for Orchard and six of the pair’s other downtown projects, with the brokerage firm announcing in May that it was out to market. The success of that fundraising round may factor into Orchard’s construction timeline, which Westbank didn’t disclose in the project’s application to the city.