SAN JOSE — An office tower at a key downtown San Jose site may be converted to other uses, including housing, a fresh sign of economic side effects in the wake of the coronavirus and an uneven return to the workplace.
The 10-story highrise, originally built in 1910, is a former Bank of the West building that is owned by DivcoWest, a veteran real estate firm.
In recent years, DivcoWest undertook a dramatic transformation of the interior of the tower that revamped the structure as a creative office building that would appeal to tech companies or advanced technology startups that were seeking a cool-looking urban space.
DivcoWest now seeks a new mission for the tower, which is located at one of downtown San Jose’s most prominent intersections, First Street and Santa Clara Street.
“An existing office building is being studied for conversion to three different non-office uses,” DivcoWest states in a preliminary filing with the San Jose Planning Department.
The three new potential uses could be multifamily residential apartments, co-living residential units, or a hotel. Co-living projects sometimes feature shared facilities such as kitchens or bathrooms.
The preliminary review is a way for the owner of a project to gauge the views and opinions of political leaders, city staffers and property neighbors regarding a development proposal. Put another way, preliminary applications are trial balloons.
The proposal for a revamped use in the tower arrives at a time when office markets in the Bay Area and numerous other metro centers nationwide and globally are burdened by fast-rising vacancy rates unleashed by multiple factors.
The return to the office in the wake of the coronavirus has proceeded at an uneven pace, leaving office buildings, especially in downtown districts, burdened with forbidding vacancy levels.
Tech companies, alarmed by a slump in their business prospects and revenue, have begun to retrench and recalibrate their hiring and even embark on widening job cuts, a process that in turn has curbed their appetite for office space.
In contrast, the entire Bay Area, including Silicon Valley, is confronted by a shortage of housing.
The lack of housing has, so far, defied an array of government initiatives to encourage the development of new residences, especially affordable homes.
A transformation and revamp of the tower would require significant work, according to the preliminary application.
“Conversion to new uses would require an architectural remodel as well as structural and a mechanical, electrical and plumbing systems remodel,” the planning documents state.
Some things are certain, regardless of the future use of the building. The tower occupies an enviable location at a busy downtown San Jose intersection.
And in the coming years, BART intends to build and open a train station just across the street from the tower’s front door.
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