SAN JOSE — A major regional transit agency is in negotiations to buy a downtown San Jose office tower for its future headquarters in a deal that could provide a big boost for the city’s urban heart.
An office tower at 488 South Almaden Boulevard is the chosen site to serve as the new headquarters for the Santa Clara Valley Transportation Agency, the VTA has decided.
If these talks were to fall through, the VTA has picked an office complex in north San Jose at 1650-1700 Technology Drive as a backup site, according to the transit agency.
The downtown San Jose office highrise that the VTA is actively negotiating to purchase is a 17-story tower that totals 379,000 square feet. CBRE, a commercial real estate firm, is marketing the office tower, which is known as Almaden Crossing.
The VTA has approved the purchase terms for the building. The terms weren’t immediately known.
In recent months this years, the VTA has been seeking out a building of as much as 500,000 square feet that it could lease with an option to buy.
“The commercial real estate market is in a position of distress,” Jessie O’Malley Solis, the VTA’s director of real estate and transit-oriented development, told the transportation agency’s board of directors at a recent meeting.
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As a result of this distress, the transit agency determined that this is an excellent time to scout for office buildings that can be transformed into the VTA’s future headquarters, Solis said during a recent VTA meeting.
“There are some significant opportunities for VTA’s potential relocation at a discounted price,” Solis said.
The Santa Clara Valley Transportation Agency is eyeing 2026 as the time frame to move into the new offices. Colliers, a commercial real estate firm,
“The intended use for this facility is office and administrative work,” according to the VTA headquarters request documents that Colliers is circulating. Colliers brokers Grant Zamudio, Paul McManus, Kevin Moul and Mike Lee are representing the VTA in its hunt for space.
The transit agency’s quest for new headquarters has surfaced at a time when the VTA has encountered wide-ranging criticism and skepticism over its attempts to bring a BART extension into downtown San Jose.
The BART project has lumbered past its budget targets multiple times and is under scrutiny due to runaway costs.
The VTA is planning to float a bond measure to help finance the purchase, tenant improvements and any necessary renovations for the office tower.
The cost of the bond measure could be as much as $135 million.
During the Oct. 3 VTA board meeting, Solis said that in her more than two decades as an expert in the commercial real estate business, she hasn’t seen a market this tough for owners of office buildings.
“This is the lowest pricing I have ever seen,” Solis said.
The VTA also hopes to help bolster the downtown San Jose economy with its move to the Almaden Crossing tower.
“In an effort to be good stewards of taxpayer funds, we are fortunate to be able to take advantage of the current buyer’s market and at the same time help fill in vacant space in downtown San Jose to shore up the vibrancy of our county’s largest city,” Solis said in a prepared statement she sent to this news organization.