SAN JOSE -- The new owners of a 57-acre site in North San Jose are planning 1 million square feet of industrial space to help create several hundred jobs in a part of the city that officials envision as a hub for cutting-edge manufacturing.

The proposed development on a site north of Highway 237 near the corner of North First Street and Nortech Parkway -- to be built on empty land by the owners of the property, Principal Real Estate Investors and Trammel Crow Partners -- underscores that the tech boom has broadened beyond Mountain View, Sunnyvale, Cupertino and Santa Clara.

"The primary reason we have so much optimism is the demonstrated job growth we are seeing in Silicon Valley," said Rod Vogel, a managing director with Principal Real Estate. "Over the last 12 to 18 months we have seen quite an increase in employment in Silicon Valley and in the San Francisco area as well."

The development dovetails with the vision that city officials have sketched for that part of San Jose.

"This could become an exciting innovation district," said Kim Walesh, the city's economic development director. "San Jose has a large concentration of advanced manufacturing capability."

Six of the 10 largest contract technology manufacturers already have a presence in San Jose, according to Walesh, including Sanmina-SCI, Flextronics and Foxconn.


Advertisement

During the 12 months that ended in March, job totals increased 3.3 percent in the South Bay, while rising 2.8 percent in the San Francisco-San Mateo-Marin region, according to figures released by the state's Employment Development Department. In contrast, in the same 12 months, California's job market expanded by only 2 percent and the nation's by 1.5 percent, government reports show.

Developers of the latest North San Jose project are confident enough that they intend to build 500,000 square feet of space on a "spec" basis, without any tenants identified or signed up ahead of time.

"We are still fine-tuning the business plan, but the primary idea is to build up to 1 million square feet of industrial space," Vogel said. "It would be light industrial, manufacturing and warehouses."

The first phase of the project would probably consist of two or three buildings. The remaining 500,000 square feet would be allocated to tenants that want to lease buildings before they are constructed, or sold to businesses.

"There would be hundreds of jobs at this location when it's fully built out," Vogel said.

The property, which Principal and Trammel bought from Cisco Systems, is already zoned for these kinds of industrial, manufacturing and warehouse operations, Vogel said. That means the company can proceed with development without long delays.

"We will start construction in the third quarter of this year," he said.

City officials believe the new development could reshape North San Jose.

"This is becoming a very interesting area for San Jose, with the transit, the housing and the new development there," Walesh said.

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos.