Huge San Jose residential complex secures key loan, construction nears

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SAN JOSE — A huge residential development that would create nearly 600 homes in San Jose next to a train station has landed a crucial development loan that paves the way for construction to start in weeks.

The subdivision, located at 1330 S. Bascom Ave. in San Jose, landed a construction loan totaling $284 million, according to Newmark, a commercial real estate firm that arranged the vital financing.

The loan will allow the project developers, Bay West Development and Forum Real Estate Group, to build and complete the units, Newmark said.

The construction loan is a welcome counterpoint to the sour funding picture for countless commercial real estate projects at a time when the coronavirus has sparked economic woes and uncertainties around the world.

Financiers have become uncomfortable providing construction finance during the worst times of the coronavirus outbreak. Lenders are now becoming more active, said Matt Gingery, a senior executive at Bay West Development.

“Capital markets have tightened during COVID, but as rents and normality have returned over the past six months, we have seen strong interest in the project,” Gingery said.

Newmark executives Ramsey Daya, Chris Moritz and Travis Bailey led efforts to arrange construction financing for the project.

One of Australia’s largest pension and superannuation funds provided construction financing.

The residential development will include 590 apartments. The housing project should be known as The Maxwell.

“The Maxwell is one of the largest multi-family housing projects ever to open in the West Valley,” said Daya, who is vice president of Newark’s debt and structured finance unit.

The new subdivision is slated to sprout on a 4.5-acre site adjacent to the Bascom light rail station in west San Jose.

“The Bascom Station development project is an outstanding example of a mixed-use, transit-oriented development project,” said Bob Staedler, principal of Silicon Valley Synergy, a land-use planning consultancy.

The residences are built on part of a 6.4-acre site known for decades as Dick’s Center. Zorba the Greek restaurant had also operated on the triangle-shaped site.

“San Jose needs to approve more projects like this,” Staedler said. “Vacant commercial buildings were unusable.”

The project’s location next to the Bascom light rail stop means residents can reach downtown San Jose and downtown Campbell in about seven minutes by train, according to Newmark executives.

The new housing development may help address the lack of housing in the western Santa Clara Valley.

“We feel like the West Valley has been undersupplied with new housing,” Gingery said. “We are thrilled to be able to build a historic transit-focused development here.”

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