SAN JOSE -- Santana Row, already a shopping, dining and entertainment destination, could also become the home for some big tech companies under an ambitious plan by the developers of the San Jose complex to construct three big office buildings that could accommodate 3,000 or more workers.
Federal Realty, the principal owner of Santana Row, wants to develop the buildings on underutilized sites at the retail, restaurant, residential and cinema complex.
Throughout Silicon Valley, developers are busy constructing new buildings and renovating existing properties to meet the needs of tech companies expanding their South Bay operations. Santana Row clearly hopes to cash in on that trend.
"The dream of any developer is to get Apple (AAPL), Google (GOOG), LinkedIn, Palo Alto Networks, Samsung -- a big single tenant for their entire building," said Chad Leiker, a vice president with Kidder Mathews, a commercial realty firm.
Together, the planned Santana Row office buildings would total about 700,000 square feet -- enough square footage to accommodate 2,800 to 3,500 workers.
Signaling the shift in focus for Santana Row, officials with the project are now referring to it as a workplace, along with its other features.
"Santana Row is a desirable campus in Silicon Valley that fosters employee retention and productivity," said Collette Navarrette, a spokeswoman for Federal Realty.
One new building would be about 250,000 square feet, and a second would be roughly 100,000 square feet, said Chris Burton, a business development official with San Jose's Economic Development Department. That means the third building would be about 350,000 square feet in size.
The new offices would be built along the south edge of Santana Row, in the vicinity of the existing CinéArts movie theaters. They would be constructed on surface parking lots and the current site of an apartment complex known as the Dudley Apartments. Federal Realty at some point would bulldoze the apartments to make way for one of the office buildings. The developer also intends to build underground parking garages with more stalls than the surface lots.
"The hope is that tech companies will decide they need a new campus," said Donna Kato, a representative for Santana Row. "These office spaces can be built to their specifications." The schedule for construction of the offices has not been announced, however.
One new building would become a combination of offices above retail and restaurants on the ground floor. Santana Row officials envision this building as a focal point for office workers, shoppers and diners.
"The master plan is to make a 'Santana Square' gathering place with retailers and restaurants that will be more of a plaza area for visitors," Kato said.
Some industry observers say Santana Row could be successful in its ambitions to become a tech campus.
"It's a great idea," said Jim Beeger, a senior vice president with Colliers International, a commercial real estate firm. "This may seem somewhat unprecedented. But the demand will be there."
Beeger pointed out that the development is in the Interstate 280 corridor, which at present is dominated by activity triggered by Cupertino-based Apple. And Burton noted a "trend of tech companies leasing space along Stevens Creek Boulevard heading away from Cupertino. San Jose hopes to capture some of that."
Apple's expansion helped to create a vacancy rate of literally zero in Cupertino for buildings of 10,000 square feet or more. Apple also has been pushing into Sunnyvale for the first time with big office leases.
In recent months, though, that expansion has pushed eastward from Cupertino along Stevens Creek, which is the northern boundary of Santana Row.
By far the biggest Apple deal in the vicinity is a 296,000-square-foot lease with veteran South Bay developer Peery Arrillaga on Stevens Creek between Tantau Avenue and I-280 in Santa Clara, just east of the Cupertino city limits. Then just a bit farther east, in San Jose, Apple has leased 50,000 square feet near Lawrence Expressway in what's known as the Triangle Building.
The Santana Row offices, though, will face the potential hazard of an overbuilt market, brokers warned."It seems like across the board, there is a lot of development," Leiker said.
The offices may help Santana Row become something of a village that could provide an array of services and amenities.
"Office workers can pretty much live, work, shop, eat and spend their entire lives at Santana Row," Kato said.
Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos.