Jay Paul Company has secured $200 million in financing for its new 19-story office building in San Jose.
The San Francisco-based developer landed the money for its 971,000-square-foot tower at 200 Park Avenue, the San Jose Mercury News reported.
The C-PACE financing deal from Connecticut-based Nuveen Green Capital replaces a construction loan by JPMorgan Chase in 2021.
The glass tower was completed last year next to CityView Plaza, the block-sized site of Jay Paul’s stalled office, retail and restaurant complex.
Newmark is seeking the first tenants for the vacant office tower, with brokers Phil Mahoney and Mike Saign holding the listing.
The tower’s green energy features helped it draw financing through the Property Assessed Clean Energy, or PACE program created by the California Statewide Communities Development Authority.
C-PACE allows building owners to borrow at low rates to make energy upgrades. Rising interest rates have heightened interest in the green financing program, which differs from other types of alternative financing, according to The Real Deal.
The financing provides money to a landlord for energy-efficiency improvements — from new windows to retrofits to gut renovations. C-PACE is not technically a loan, but a property tax assessment at a fixed rate that’s paid back over time.
The financing also indicates that Nuveen Green Capital believes Jay Paul can fully lease its offices in a Downtown office market where office vacancy early this year was 35.6 percent, according to Savills.
In March, Jay Paul sought a five-year extension for its stalled CityView Plaza development bounded by Almaden Boulevard, West San Fernando Street, South Market Street and Park Avenue, across from its new 200 Park office building.
In 2018, the developer paid $283.5 million in cash for nearly all of CityView Plaza, a 580,000-square-foot complex of offices, shops and restaurants.
The developer then bought two adjacent properties with plans to redevelop CityView Plaza with three 19-story, interconnected office towers containing 3.4 million square feet of offices, shops and restaurants. It would also include 85,000 square feet of rooftop terraces and an 80,000-square-foot gym.
Jay Paul Company, led by billionaire Jay Paul, has developed 12 million square feet of offices in Silicon Valley, leasing offices to such companies as Hewlett-Packard, Amazon.com and Apple, according to Forbes. The developer also owns properties in Santa Cruz, San Diego and Austin, Texas.
— Dana Bartholomew
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