Erik Hayden was recently featured at Bisnow’s “Silicon Valley State of the Market” panel focusing on how the current market trends, the housing crisis, and government policies are affecting the ground-up developments in the area. Speaking alongside panelists Nuria Fernandez, CEO of Santa Clara Valley Transportation Authority; Jeff Rogers, President of Briggs Development; and Jeffrey Current, President of Studio Current, moderated by James Heilbronner, President of Architectural Dimensions, Erik emphasized how the Silicon Valley job engine drives demand for multi-use properties combining retail, office, and residential.
- The most interesting discussion point addressed by Erik was in regards to the four major risks associated with development: entitlements, land development, construction and market. It’s important for developers to completely understand these risks in order to understand the returns associated with taking these risks and how to mitigate them for potential investors.
- Panelists also discussed the overall housing crisis and how the local governments are putting things in place to encourage ground up development projects, especially in urban areas like downtown San Jose. A good example of this is the City of San Jose’s streamlined entitlement process which reduces the time it typically takes to get entitlements by more than half.
- In talking about growth in the urban cores, Erik specifically mentioned that millennials want to live in more urban environments and how downtown San Jose is the only true urban environment in Silicon Valley.
- The bottom line? The San Jose real estate market isn’t just strong. It’s on fire!
The local government policies associated with ground-up developments in San Jose make development easier and streamline the risk associated with building new projects because the government supports it. Furthermore, the transit physical infrastructure in urban locations is already in place. Last but not least, it’s in Silicon Valley, where the large migration of tech companies moving southward is creating this massive amount of demand for all of the projects that Urban Catalyst is building.
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