120-Acre San Jose Flea Market Site Put Up For Sale

May 28th, 2008

The San Jose Flea Market land is up for sale. The 120-site, after going through nearly a decade of entitlements, has been put on the market for sale. The site is entitled for nearly 2900 homes and 350,000 square feet of commercial space (office and retail).

The site is a vast flat parcel in the middle of housing and commercial development in San Jose. Challenges facing the site include having to work with the seller’s to relocate the existing flea market inland and working on a timetable possibly centered around BART’s planned extension into downtown San Jose though a portion of the property is currently ready for development, allowing for 800 homes and about 100K SF of commercial development.

There is no price tag attached to the site officially, but in light of current housing conditions in North and East San Jose, as well as where capital markets are today, it is likely that the value of the property has dropped roughly 20% from where it would have been in 2005 or 2006.

Similar large transactions of residential housing in the valley have generally ranged from the $50-80 ($2.4-3.4M/Acre) psf range in the past few years and it is likely that this parcel will be near the lower end of that range given the inherit market risk, lower home values in that area of San Jose in contrast to Santa Clara/Sunnyvale markets, current state of capital markets, and of course the staggered/delayed timeline that any development proforma will need to account for.

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