San Jose Church Acquires Nearby Warehouse for $21M

San Jose-based First Pentecostal Church has acquired an industrial building 20 minutes from its main location for $21 million, according to public records. The seller was an entity that traces back to business service company Registered Agent Services.

The property is located at 5891 Rue Ferrari Road in San Jose and has 73,000 square feet. The industrial building was built in 1997 and sits on a 5-acre lot. The property is classified as intended for research and development use and is located in an industrial hotbed in San Jose.

The church did not respond for comment on the intended use of the space.

There is a trend nationally of churches looking to industrial buildings as an extension of their worship space. A report by Chicago-based Aspen Group found that some of the most important aspects of warehouse-to-church conversions are lights, sightlines and construction material.

Grace Midtown Church acquired a 3-acre industrial building in Georgia to convert into a 1,000 seat auditorium. The church also converted the parking lot into a multi-use gathering space.

“Grace Midtown is a good example of how churches are rethinking their buildings and how they relate to the public realm, re-establishing the relationship between the public space and the congregants inside,” designer Marques King, said.

In Nevada, Carson City Christian Fellowship converted a 25,000-square-foot warehouse into an extension of its congregation that includes a reception location, shared offices, classrooms for infants, toddlers and grade schoolers and kitchen and storage areas.

While the demand for warehouse space remains high at the start of 2023, it has cooled from the red-hot 2022 market, according to a report by brokerage Cushman & Wakefield. Subleases account for 25 percent of the available space in the Silicon Valley market, compared to 6 percent a year ago. Leasing activity decreased to 757,000 square feet which was about half of what it was in the fourth quarter of last year.

“Most tenants have put expansion or relocation plans on hold possibly due to the uncertain economic times,” the report said.