Chambers’ playbook SILICON VALLEY Former Cisco CEO has seen several downturns and has a survival guide BUSINESS JOURNAL CROMWELL SCHUBARTH, 20 FOCUS: STRUCTURES EXTRA BUSINESS GROUPS A SIGNAL FOR OPTIMISM IN THE FUTURE Ahmad Thomas, the new CEO of the Silicon Valley Leadership Group, almost chose to not pursue the position left open by the departure of Carl Guardino. But one event changed his mind. JODY MEACHAM, 18 THE INTERSECTION OF WINCHESTER AND STEVENS CREEK BOULEVARDS — A VITAL AREA WHERE SAN JOSE SOCIAL CAPITAL AND SANTA CLARA MEET — GETS READY FOR ITS NEXT COMMUNITY AND EVOLUTION AS A LIVE-WORK-PLAY DESTINATION. CONNECTION 27 STORIES BY MATTHEW NIKSA AND JODY MEACHAM | 4-11 SJ construction projects 12 SILICON VALLEY Breaking news online BUSINESS JOURNAL r SiliconValleyBusinessJournal.com July 31, 2020 Vol. 38, No. 20, $5.00 Follow us on Twitter 50 W. San Fernando St. @SVBizJournal Suite 425 San Jose, CA 95113 Daily email updates L bit.ly/NewslettersSVBJ 4 SILICON VALLEY BUSINESS JOURNAL FOCUS: STRUCTURES EXTRA WINCHESTERVILLE SANTANA TERRACE Description: A three-story office building has been demolished to make way for 92 market-rate apartment units for seniors in two new four- story buildings. The project is under WEST construction. SIDE STORY AGRIHOOD Description: The approved development includes 361 residential BY MATT NIKSA units (181 of which are designated as [email protected] below market rate), an urban farm and ground-floor retail space. Developers are seeking financing. ll but one of the iconic domed Century mov- ie theaters are gone. 1 So too is the first Bob’s Big Boy restaurant in Northern California. Instead, after years of STEVENS CREEK SUBARU Aplanning and legal disputes, a new office Description: The project located development is rising across from Santa- adjacent to a Subaru dealership is na Row in West San Jose. comprised of a new two-story Subaru What’s replacing these bits of San dealership and service shop with an Jose’s past is a new Class A office devel- attached three-level parking structure. It is under construction. opment rising near one of the most important intersections in Silicon Valley — that of Winchester and Stevens Creek Boulevard. This area, which the Busi- ness Journal is calling Winchesterville, is already one of the area’s top retail and restaurant destinations, and it’s growing in stature as both an office hub and res- idential center. It’s here where Santana Row own- er Federal Realty Investment Trust is SANTANA WEST undertaking the biggest expansion of Description: A multiphase Class A its renowned “live-work-play” property office campus directly across from since it opened in 2002. Santana Row that could have three But amid a persistent pandemic, this office buildings offering 1 million square development — dubbed Santana West — feet of space if fully built out, plus a 1,400-space parking garage. also represents Federal Realty’s confi- dence in creating new office space “on spec.” It’s an approach the Rockville, Maryland-based firm has been bull- ish on even as some developers balk at building without committed tenants. R An aerial And with this particular project — an view looking eight-story, 375,000-square-foot office west from building called One Santana West that I-280. This broke ground exactly one year ago — Fed- area, which eral Realty has no intention to alter its starts in San design to adjust to how people will work Jose and in the wake of Covid-19. That’s because becomes the building already has enough design Santa Clara WINCHESTER RANCH flexibility to accommodate any corona- after crossing Description: An approved project virus workplace strategy. Stevens comprised of 31 buildings offering a “I don’t like the expression ‘play Creek combined total of 687 residential units defense,’ but that’s what we do a little bit Boulevard, on the site of a mobile home park. The when we design these kinds of things,” is a growing project has yet to break ground. said Seth Bland, senior vice president of center of West Coast development at Federal Real- businesses, ty. “We really can’t afford to be caught commerce flat-footed and stay alive in this business.” and residential CONTINUED ON PAGE 6 living. JULY 31, 2020 5 WESTFIELD VALLEY FAIR EXPANSION Description: The shopping center in March unveiled a 500,000-square- foot expansion in March that features CAMBRIA HOTEL new public areas and plazas, a new Bloomingdale’s and at least 11 new & SUITES SAN JOSE retailers. It now totals 2.2 million Description: An approved hotel project with square feet of retail space. up to 172 guest rooms across the street from Westfield Valley Fair. The 10-story project has yet to break ground. SANTANA ROW Description: A residential and commercial district that as of July 31 offers 2.1 million square feet of retail, office, hotel and residential space, 3 including 50 shops, 30 restaurants and the 215-room Hotel Valencia. 6 2 5 4 ADDITIONAL PROJECTS 335 SOUTH WINCHESTER PROJECT 1 Description: A five-story, nearly 95,000-square-foot project that would include four levels of office space, ground-floor retail space and one level of underground parking. An application is under San Jose planning review. 425 SOUTH WINCHESTER PROJECT 2 Description: A proposed five-story building that includes about 8,000 square feet of commercial and retail space, about 4,540 square feet of office space and 27 residential units. An application is under San Jose planning review. WINCHESTER MYSTERY HOUSE VOLAR Description: The 24,000-square-foot mansion 3 Description: An approved 18-story tower that calls for 307 rental residential units and up to across from Santana Row was built from 1886 49,234 square feet of commercial and office space. The project has not broken ground. to 1922 and includes 10,000 windows and 160 rooms. It is a popular tourist attraction and a historic landmark. 500 SANTANA ROW 4 Description: A six-story Class A building offering 234,500 square feet of office space, all of which is occupied by data analytics company Splunk Inc. and video conferencing company Blue Jeans Network Inc. 700 SANTANA ROW 5 Description: An eight-story Class A building at Santana Row’s west end totaling 319,000 square feet. Data analytics company Splunk Inc. agreed to lease the property’s entire office portion — 301,000 square feet — in 2018. LOT 12 6 Description: An approved 5.5-story building offering 258 multifamily residential units at the southeast corner of Santana Row. Project is going through San Jose’s building permit approval process. THE 111TH PHOTOGRAPHY FOR SVBJ 6 SILICON VALLEY BUSINESS JOURNAL FOCUS: STRUCTURES EXTRA look no further than its two most recent CONTINUED FROM PAGE 4 San Jose office projects for an answer. Data analytics company Splunk Inc. Case in point: One Santana West, in 2015 agreed to lease the six-sto- located at the corner of Olin Avenue ry, Class A 500 Santana Row building, and Winchester Boulevard, includes totaling 234,500 square feet, while it was floorplates in the low-50,000-square- still being constructed. In summer 2018, foot range, which “lend themselves very Splunk more than doubled its Santana well to the planning and programming Row footprint by leasing 301,000 square for today’s tenant,” Bland said. feet — the entire office portion — of the Other aspects that were designed nearby eight-story 700 Santana Row. pre-Covid-19 include three two-lane Both deals showed that Federal Realty staircases next to seven elevators, with could not only attract tenants to Santa- an opportunity to construct addition- na Row, but retain them, too. al interconnecting stairs. The developer “There are precious few office options already planned for touchless automa- like Santana West available,” Jan Sweet- tion for elevators, public access doors, nam, Western Region chief operating restroom fixtures and doors. And it also officer at Federal Realty, said in a news mapped out outdoor space with a rough- release. The monthly asking rent for ly one-acre plaza between One Santana One Santana West as of July 28 is $4.65 West and the site of the adjacent Two a square foot on a triple-net basis, mean- Santana West, a planned eight-story ing the tenant is responsible for paying Class A building whose development utilities, property expenses and building permit application is going through San services. For comparison, Splunk’s first- Jose’s project review process. year base rent at 500 Santana Row was about $3.66 a square foot a month, triple Proceeding ‘as originally planned’ net, as part of a nearly 11-year lease that One Santana West is being developed includes 3% annual bumps, according to without a tenant in tow. an SEC filing. Federal Realty and brokers Todd Shaf- STAN OLSZEWSKI FOR SILICON VALLEY BUSINESS JOURNAL If all goes according to plan for Federal fer, Tracey Solari and Randy Gabrielson O Seth Bland, senior vice president of West Coast development at Federal Realty. Realty, once One Santana West is leased of Newmark Knight Frank, which has an up, construction of Two Santana West office in Santana Row, are having con- P The domed Century 21 theater could eventually be converted into an would begin. There’s also an expansion versations with potential tenants for the “innovation hub.” The building, which was designated as a historic city opportunity totaling 300,000 square feet project, which is expected to be avail- landmark in 2014, sits on the southwest corner of the Santana West site. of office space near the corner of Olsen able for first tenant build-outs in July Drive and Maplewood Avenue that’s part 2021, Bland said.