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Keystone construction project building rendering
Erik HaydenFeb 23, 2023 11:20:28 AM7 min read

Check out the progress we’re making to take our hotel project vertical

Our demolition subcontractor began last week to clear the site of our Keystone project, Downtown San Jose’s first extended-stay hotel. We’re on track to go vertical next quarter on the eight-story Marriott TownePlace Suites at the northeast corner of West San Carlos and Josefa streets. As you’ll see below in the photos we took of the site last week, crews of workers are making headway on clearing the property to allow us to do so.

demolition at Opportunity Zone site
Our demolition subcontractor razes one of the vacant homes on the site of our Keystone project on Feb. 17, 2023.

We've set up live-stream and time-lapse cameras at our Keystone site that you'll soon be able to check periodically to monitor our progress. The time-lapse camera is identical to the one we installed at our Paseo office-retail project. Scroll to the bottom of our Paseo website to watch a time-lapse movie of the project's construction.

Click here to read the news release we published yesterday on Keystone going vertical, which mentions the project’s groundbreaking ceremony we held last month. San Jose Mayor Matt Mahan and San Jose City Councilmembers Dev Davis and Omar Torres were among the attendees. Mayor Mahan (photographed below) said during the event that Urban Catalyst is committed to a long-term vision with a diversified portfolio that takes into account “placemaking and making San Jose as a whole, but particularly our urban core, an amazing place to live, work and play.” His words nicely summarize our vision and what we’re looking to bring to Downtown San Jose.

And we wholeheartedly agree with another point Mahan made earlier in the ceremony: “There’s so much opportunity in our city, particularly in and around our urban core, with the big transportation infrastructure projects that are moving forward, the incredible weather we have, and the diversity and talent here.”

Urban Catalyst Keystone Ground Breaking Event San Jose California
San Jose Mayor Matt Mahan swings a sledgehammer into a wall in one of several buildings we're demolishing as part of our Keystone project.

We’d be remiss if we didn’t acknowledge The Mercury News, The Real Deal, and SF YIMBY for featuring Keystone in articles about the hotel’s construction loan and our demolition subcontractor clearing the project site. Thank you also to The Registry for republishing our Keystone news release. Stay tuned for a blog we plan to publish next week that details how we obtained construction financing for the project, Downtown San Jose’s only hotel to break ground during Covid.

Keystone is the third of eight Opportunity Zone development projects we’ve broken ground on, following our senior living facility a block away and Paseo. We’re scouring the market for construction financing for two projects a short walk from Keystone with nearly 450 senior housing and apartment units between them.

A bird's-eye view of our Keystone site on Feb. 17, 2023. The eight-story project is slated for completion in the first quarter of 2025.

Although we’ve closed fundraising for the apartment project, we continue to raise money for our senior living development through our Fund II offering. If you want to learn more about how to invest, contact us here.


Important Disclosures

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").

All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM.

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.


Erik Hayden

Responsible for developing more than $3.5 billion in real estate projects, including over 2,300 residential units in the California Bay Area, Mr. Hayden has experience in acquisition, contract negotiation, due diligence, risk assessment, financing, construction, and disposition of multifamily, single family and large mixed-use and master planned developments. He maintains relationships with a broad network of property owners, enabling him to identify and acquire prime investments. Mr. Hayden also has expertise in navigating projects through the entitlement process by working with elected officials, community groups, and political organizations to gain support and get projects approved.