Success Story: Big downtown San Jose towers fill to the brim
SAN JOSE — Riverpark Towers, a striking downtown San Jose office complex of two highrises, is now fully leased up, marking a major success story in the urban core of the Bay Area’s largest city.
A burst of leases with tech firms and other companies has brought Riverpark Towers to a jaw-dropping milestone of 99.8 percent full, according to experts from Newmark Knight Frank, a commercial real estate firm handling the marketing of the building.
The leasing surge at Riverpark Towers also points to a major upswing for office properties in downtown San Jose.
It wasn’t that many years ago that experts viewed downtown San Jose as a moribund office market with high vacancy levels and sluggish rents that took a back seat to tech hubs with low vacancy levels such as Palo Alto, Mountain View, Cupertino, and Sunnyvale.
In the last year or two, office rents have jumped in downtown San Jose and vacancy levels have steadily dwindled to the point that office spaces have become tough to find.
For the last two years, Newmark Knight Frank brokers Anne Ralston, Phil Mahoney, Michael Saign, and Joe Kelly have scouted for tenants to lease spaces in Riverpark Towers, whose owners are DivcoWest and Rockhill Management.
“Riverpark Towers has incredible unobstructed views and we have the closest building to the Diridon train station,” said Ralston, a senior managing director with Newmark Knight Frank. “These qualities have made Riverpark Towers stand head and shoulders above the competition.”
The brokers have used deals with up-and-coming tech firms such as Sage Intacct and Cohesity, as well as space-sharing pioneer WeWork, deft uses of available floors in the buildings, and shifting of tenants in the complex, to steadily fill up the two towers.
Leases are with two tenants are now awaiting final signatures, and those deals would mean Riverpark Towers is about as full as it can get.
About two years ago, when a team of experts from Newmark Knight Frank, a commercial real estate firm one of the two downtown San Jose towers was just 62 percent full. The remarkable turnaround has brought the occupancy to 99 percent-plus.
Riverpark Towers contains about 600,000 square feet of office space. Tower 1 totals 297,000 square feet, while Tower 2 is 303,000 square feet, according to the DivcoWest website.
The Newmark brokers also have accommodated a hiring boom on the parts of both Cohesity and Sage Intacct.
When the two tech upstarts signed their initial leases in Riverpark Towers, they each took roughly 40,000 square feet, Ralston recalled.
Now, Sage Intacct and Cohesity both occupy about 160,000 square feet, a stunning four-fold increase for both companies.
“That’s the story of downtown San Jose,” said Scott Knies, executive director of the San Jose Downtown Association. “People have this perception that downtown is a certain way, and then it outperforms.”