We’ve got a lot of projects in development at Urban Catalyst, but one of the ones I’m most excited about is Paseo.
This development, in the heart of downtown San Jose, will turn the long-shuttered Camera 12 theater into 100,000 square feet of mixed-use office and retail space. We anticipate several full-service bars and restaurants as tenants, adding to the “restaurant row” that’s developing along the Paseo de San Antonio.
It’s an exciting revamp of an iconic downtown structure—urban revitalization at its best. So we were happy to announce last week that we closed on the senior construction loan and pulled a build permit. The $56.2 million loan is through Rialto Capital. Construction is expected to finish in July 2022.
News publications have picked up on our big news as well.
Matthew Niksa, a former Silicon Valley Business Journal reporter who recently joined The Real Deal, penned an article titled, “Downtown San Jose mixed-used office, retail project hits double milestone.”
“Dubbed ‘Paseo,’ the three-story development is located at 201 S. 2nd St., a desirable address in San Jose’s core thanks to its proximity to a light-rail station and San Jose State University,” Niksa wrote. “It also sits on the Paseo de San Antonio, which is lined with storefronts and connects the university to the heart of the city’s downtown.”
And in an article titled, “Construction starts at downtown San Jose office, retail project,” Mercury News business reporter George Avalos told readers that, “A wide-ranging redevelopment project is underway to transform a long-shuttered movie theater in downtown San Jose into a thriving office, retail, and restaurant complex.”
In all, there will be about 75,000 square feet of office space on two floors, with over 25,000 square feet of retail on the ground floor. What’s particularly cool about revamping a former movie theater is the high ceilings, which will enable features such as “floating” conference rooms, mezzanine levels and catwalks.
The Registry also featured our news, placing its article in the lead position of its home page.
This project is among six in our Fund I, which closed in December after raising $131 million in Qualified Opportunity Zone Fund investments. Urban Catalyst Opportunity Zone Fund II, which focuses on office and residential development in downtown San Jose, is raising $200 million and is now open to investors.
If you are thinking about investing, don’t wait too long. The potential 10% reduction of capital gains taxes disappears on Jan. 1, 2022. Contact us to learn more.
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Opportunity Zone Disclosures
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- Long-term investment. Opportunity zone funds have illiquid underlying investments that may not be easy to sell and the return of capital and realization of gains, if any, from an investment will generally occur only upon the partial or complete disposition or refinancing of such investments.
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- Capital call default consequences. Meeting capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of your interest in the fund.
- Opportunity zone funds may use leverage in connection with certain investments or participate in investments with highly leveraged capital structures. Leverage involves a high degree of financial risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments.
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