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.
Contact us to learn more.
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The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof ("Issuer").
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With respect to any performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. Assumptions are more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment.
These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified.
Past performance are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.
Real Estate Risk Disclosure:
- There is no guarantee that any strategy will be successful or achieve investment objectives including, among other things, profits, distributions, tax benefits, exit strategy, etc.;
- Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
- Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
- Potential for foreclosure – All financed real estate investments have potential for foreclosure;
- Illiquidity – These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.
- Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
- Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits
- Stated tax benefits – Any stated tax benefits are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.
Opportunity Zone Disclosures
- Investing in opportunity zones is speculative. Opportunity zones are newly formed entities with no operating history. There is no assurance of investment return, property appreciation, or profits. The ability to resell the fund’s underlying investment properties or businesses is not guaranteed. Investing in opportunity zone funds may involve a higher level of risk than investing in other established real estate offerings.
- 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.
- Limited secondary market for redemption. Although secondary markets may provide a liquidity option in limited circumstances, the amount you will receive typically is discounted to current valuations.
- Difficult valuation assessment. The portfolio holdings in opportunity zone funds may be difficult to value because financial markets or exchanges do not usually quote or trade the holdings. As such, market prices for most of a fund’s holdings will not be readily available.
- 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.
- Unregistered investment. As with other unregistered investments, the regulatory protections of the Investment Company Act of 1940 are not available with unregistered securities.
- It is possible, due to tax, regulatory, or investment decisions, that a fund, or its investors, are unable realize any tax benefits. You should evaluate the merits of the underlying investment and not solely invest in an opportunity zone fund for any potential tax advantage.
The above material cannot be altered, revised, and/or modified without the express written consent of Urban Catalyst.
