VQ5 Properties purchases East San Jose strip center for $10.5M

VQ5 Properties has picked up a shopping center with a shuttered CVS drug store in East San Jose for $10.5 million.

The San Jose-based real estate investor, led by Tuong Vy Nguyen, bought the 26,500-square-foot strip mall at 1685 Tully Road, the San Jose Mercury News reported. The seller was Longs Drug Stores California.

In 2019, VQ2 Properties, led by Nguyen, paid $22.8 million for a 4.6-acre shopping center next door, which contains a 14,700-square-foot Lucky 7 supermarket.

With the new purchase, the Nguyen family owns a combined 8.9-acre shopping center.

“This a very good opportunity now that the entire property is under a single ownership,” said David Taxin, a partner with Meacham/Oppenheimer, a commercial real estate firm. “This is a lot of land to control, being on Tully Road. It’s irreplaceable infill property.”

A marketing brochure for the latest purchase was circulated by Rick Shaffer and John Shaffer of CBRE, which said its primary trade area includes two of San Jose’s most affluent communities, Silver Creek and Evergreen.

In 2008, CVS Health bought Longs Drugs. After the sale, CVS converted Longs to stores with the CVS brand. The CVS store on Tully Road closed last fall.
A number of restrictions on future uses of the property accompanied the purchase transaction, according to the Mercury News, citing county records.

“No part of the property shall be leased or used for any of the following uses: a pharmacy mail order facility, a drug store, a pharmacy prescription department or a retail health center,” a document that accompanied the purchase deed stated. A CVS “minute clinic” was listed as a prohibited use.

Among the allowed uses: “physician, dentistry or other health care offices or practitioners that are separately operated and not located in any retail store or establishment,” the county records state.

Plenty of possibilities beckon for the future of the retail center, in Taxin’s view.

“Having this whole parcel means the new owner could reimagine it, add value by leasing the empty building, or they could redevelop all or part of it,” Taxin told the newspaper. “This is a great location on Tully Road.”

VQ Properties was founded by Davin Nguyen in 2017 in San Jose, according to state business records, followed by VQ2, VQ3 and VQ4 Properties. VQ5 Properties was founded last April; its agent is listed as Vy Nguyen, based at the same address.

— Dana Bartholomew