San Jose housing tower goes up for sale amid wobbly residential market – Silicon Valley

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SAN JOSE — A prominent San Jose housing tower that opened just a few years ago is up for sale at a time when the market for apartments is facing economic uncertainties.

The Grad San Jose is on the sales block about four years after it was completed, according to a marketing brochure that JLL, a commercial real estate firm, is circulating.

The Grad San Jose, a 260-unit, 19-story student housing tower at 88 East San Carlos Street in downtown San Jose. (Google Maps)
The Grad San Jose, a 260-unit, 19-story student housing tower at 88 East San Carlos Street in downtown San Jose. 

The 19-story tower includes 260 student housing units that collectively contain 1,039 beds, according to a post on the website of Amcal, a real estate firm. Amcal specializes in the development of affordable housing for students and middle-class workers.

“The Grad offers investors a core student housing opportunity in the fastest growing urban market at a discount to replacement cost,” JLL stated in its marketing package.

The Grad San Jose, a 19-story, 260-unit student housing tower at 88 East San Carlos Street in downtown San Jose. (Google Maps)
The Grad San Jose, a 19-story, 260-unit student housing tower at 88 East San Carlos Street in downtown San Jose. 

The L-shaped housing tower was developed through an alliance of Amcal and Swenson, a veteran San Jose-based real estate developer and builder. The Amcal and Swenson team completed The Grad in 2020.

JLL described some of The Grad’s amenities as “resort-style” in quality, including a big swimming pool.

“With a three-quarter-acre amenity deck featuring a luxurious pool and jumbotron, as well as private study rooms on every residential floor, residents get the best of both worlds,” JLL states in the marketing package.

The deck offers a place to relax and unwind as well as a private area to study in a quiet setting, according to the sales package.

In the wake of the spike in interest rates and inflation, Bay Area apartments are selling for somewhat less than before the surge in rates and consumer prices, based on a non-scientific survey of high-profile deals involving multifamily properties in the region.

After the jump in interest rates, the average price for apartment buildings that were sold was $520,700 per unit, based on selected Bay Area transactions that were completed in 2024 and in the final three months of 2023.

That per-unit price in the era of high interest rates and soaring inflation was roughly 5% below the per-unit prices that were being paid before the spike in consumer prices.

With interest rates soaring, apartment buyers find it tougher to justify purchases unless the prices are sufficiently low for the residential complexes. That’s because the monthly mortgages will be expensive if the buyer obtains a loan to finance the purchase.

In the case of The Grad San Jose, JLL didn’t specify an asking price in the sales brochure.

The Grad San Jose’s property value was $182.3 million as of January 2023, according to documents on file with the Santa Clara County Assessor’s Office.

The housing tower also includes 14,900 square feet of ground-floor retail, JLL states in the brochure.

“The Grad offers investors a core student housing opportunity in the fastest growing urban market at a discount to replacement cost,” the JLL brochure states.

A buyer also might be able to wring more revenue out of The Grad San Jose by configuring some of the residential units.

“Investors are offered the ability to generate nearly $1.5 million of additional revenue by introducing 46 additional double-occupancy beds as well as through leasing the remaining ground-floor retail suites,” JLL states in the brochure.

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