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San Jose real estate deal shows city’s mall areas are “premium” sites

SAN JOSE — A newly revamped building in San Jose near Westfield Valley Fair and Santana Row has been bought at a price that reflects what one expert says is the “very high premium” nature of this area.

Local real estate investors Brandenburg Properties and SDS NexGen Partners, acting through affiliates, have teamed up to buy a retail and office building at 2910 Stevens Creek Boulevard.

Brandenburg and SDX NexGen paid slightly under $17.6 million for the two-story building, according to documents filed on June 14 with the Santa Clara County Recorder’s Office.

University Avenue Partners, the building’s seller, renovated the structure in 2017 in a wide-ranging upgrade.

“We took a dilapidated building and turned it into this beautiful gem right at the hard corner entrance to Westfield,” said Donald Tepman, a principal executive with University Avenue Partners. “We are delighted Brandenburg Properties and SDS NexGen Partners will be its future owners and caretakers.”

The buyers paid cash for the building, which totals 13,500 square feet, county documents show.

The just-purchased building appears to be in an ideal spot.

Two iconic and landmark commercial centers are the primary draws for this part of western San Jose: Westfield Valley Fair Mall, which last year completed a $1.1 billion renovation and expansion; and Santana Row, a destination restaurant, retail, office, residential, and hotel complex.

The just-bought building is directly across the street from a brand new section of Valley Fair mall that includes the sites of a new Apple store, Tiffany’s store, Eataly food marketplace, and a Mastro’s restaurant. It’s also right around the corner from Santana Row.

The price for the 2910 Stevens Creek building works out to just a shade over $1,300 a square foot. The transaction was arranged through Marcus & Millichap commercial real estate brokers Yuri Sergunin and J.J. Taughinbaugh.

While not a record, that price is far higher than typical for San Jose and well above what the seller paid for both this building and one that it owns nearby. Just about two or three years ago, $1,000 a square foot was deemed to be a very high price for this type of building in Silicon Valley.

“This is a price for a very high premium area, and that’s what this part of Silicon Valley is,” said Sergunin, a first vice president of investments with Marcus & Millichap.

The tenants in the 2910 Stevens Creek building are a ground-floor Verizon retail store and office tenants Bank of the West and esports entertainment upstart Theta.tv.

“It’s an A-plus-plus area,” Sergunin said. “This is where businesses want to be.”

University Avenue Partners owns properties at other choice sites in the immediate vicinity, including a building at 2880 Stevens Creek Blvd. across the street and another at 2960 Stevens Creek Blvd.

In 2017, University Avenue Partners paid $7.3 million, or $507 a square foot, for a building totaling 14,400 square feet at 2960 Stevens Creek Blvd.; and $31.1 million, or $518 a square foot, for a building totaling 60,000 square feet at 2880 Stevens Creek Blvd.

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