Bay West Development, approved to replace a Fry’s Electronics headquarters in North San Jose with 1.9 million square feet of tech offices, now says “Not so fast.”
The Campbell-based developer will rent out part of the 20-acre Mayan-style campus at 550 East Brokaw Road, the San Jose Mercury News reported. It has listed up to 124,000 square feet of the industrial space for lease.
The listing has apparently paused plans to build a 3.8 million-square-foot project, which would include seven eight-story buildings wrapped by curtains of glass, with white and copper accents.
The project would also include 1.65 million square feet of parking in two nine- and 10-story garages for nearly 5,400 cars and more than 400 bicycles.
Bay West won approval to build the spec project in March. The former Fry’s headquarters, warehouse and store, spanning 293,900 square feet, were to be bulldozed along with 274 trees.
Fry’s, a San Jose-based chain of electronics big-box stores known for their distinctive themes, opened in 1996 and closed in early 2021. The North San Jose site was home to its corporate headquarters and a superstore modeled on a Mayan temple.
Brokers Phil Mahoney and Joe Kelly of Newmark hold the warehouse listing. An asking price was not disclosed.
“It could be industrial, logistics or light manufacturing,” Mahoney told the Mercury News. “We’re getting a lot of interest in leasing the space.”
The pause may be due to high office vacancy and mass tech layoffs in Silicon Valley. In the first quarter, office vacancies jumped to an historic high of 23.1 percent, according to Savills.
In the first three months of this year, tech companies have cut 16,300 jobs in the Bay Area, according to seasonally adjusted estimates from Beacon Economics. More layoffs may be in the works.
“There isn’t as much demand for office space right now,” Mahoney told the Mercury News.
Read more
Commercial
San Francisco
Bay West Development OK’d for 3.8M sf office campus in San Jose
Commercial
San Francisco
Office vacancies in San Francisco jump to a record 33%
Commercial
San Francisco
Google’s Downtown West illustrates distress in Silicon Valley
The uncertain economy during the era of remote work has caused tech firms to shed office space. Google has paused its massive transit village known as Downtown West in San Jose, with no plans to restart the project.
Bay West Development, founded in 1979 by Bill Poland, has completed $3.9 billion in projects in California, Washington and Texas, according to its website. Its development pipeline includes converting a former Fry’s store in Renton, Washington.
— Dana Bartholomew