SAN JOSE — A downtown San Jose site where highrise housing is being planned has been put up for sale by a China-based real estate firm whose top leaders include a principal executive who has been arrested in London.
The Pacific, as the residential project is known, is deemed to be in a prime location in downtown San Jose, and has received final city approval.
CBRE, a veteran commercial real estate firm, has been hired to market the choice property. CBRE executive vice president Jef Henderson and first vice president Jon Teel are leading the sales effort. CBRE executives Andrew Behrens and Jesse Weber are providing debt and finance expertise in the selling endeavor.
“This property is in the epicenter of growth and development in downtown San Jose,” Teel said.
The highrise housing is being eyed on a property that’s a former Greyhound bus terminal on the corner of South Almaden Avenue and Post Street.
Despite the apparent advantages of the site as a housing development, the project’s principal owner and developer, Z&L Properties, has yet to break ground.
“Putting the Greyhound station site on the market and a transaction to buy it is inevitable,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. “If you look at their track record, Z&L just doesn’t have the wherewithal to develop properties.”
The developer’s inability to break ground fits a pattern. Z&L Properties has struggled mightily with its Bay Area property portfolio, which is located primarily in downtown San Jose and San Francisco.
China-based Z&L Properties has completed just one Bay Area project, a double-tower housing highrise in downtown San Jose near San Pedro Square with roughly 640 units. Only one tower is available for occupancy.
The company has also proposed a pair of housing high-rises and the revamp and rescue of a historic church at 252 N. First St. in San Jose. Neither tower has been built and the old church is covered by a tattered black tarp.
In 2021, Z&L Properties yielded ownership of one of its development sites, a 1.6-acre property near the corner of Terraine Street and Bassett Street. Z&L’s plans for a big residential tower at that location had stalled.
An alliance led by global developer Westbank, local developer Gary Dillabough, and San Jose-based Terrascape — a firm headed by real estate veterans Tony Arreola and Mark Lazzarini — paid $11.4 million for the choice Terraine Street parcel. The property is in a downtown district known as the North San Pedro neighborhood.
The Greyhound terminal site that’s up for sale has received final approval from the city for the development of 708 housing units. The property has addresses ranging from 60 to 70 South Almaden Avenue in San Jose.
The attempt to sell the Greyhound site arrives at an uncertain time for Z&L Properties.
Zhang Li, a real estate tycoon and principal executive with Z&L Properties, was detained in London in December 2022 in connection with a U.S. investigation into possible kickbacks and bribery involving a project in San Francisco.
A court in London was told last month that Zhang was wanted in the United States over an investigation into the payment of bribes to San Francisco city officials linked to the granting of permits for a project in that city.
Despite the legal turmoil that swirls around Zhang, the prospects could be favorable for the bus terminal development site.
“As one of the most dense development sites” in downtown San Jose, “this will be the future anchor of a whole neighborhood spiraling around the old Greyhound site,” said Mark Ritchie, president of Ritchie Commercial, a real estate firm.
A new owner of the Greyhound property would control a site near and next to several office towers whose occupants might want to live near their workplace.
“You don’t want to have 50,000 people coming into downtown San Jose every weekday and then 50,000 people leaving every night,” Teel, the CBRE executive, said. “You want people to be able to live, work and play downtown.”
Among the existing and future office projects in downtown San Jose that could bolster the new housing development:
- Adobe is preparing to move into a new office tower at 333 West San Fernando Street where the tech titan would employ thousands.
- An office tower at 200 Park Avenue has been completed by veteran Bay Area development firm Jay Paul Co.
- Park Habitat, a tower with offices and gardens at 180 Park Avenue, has broken ground. Global mega-developer Westbank and local developer Urban Community are working to build this project.
- A mega campus bounded by Almaden Boulevard, West San Fernando Street, South Market Street and Park Avenue has been proposed by Jay Paul.
Google continues to push ahead with its development of a new neighborhood of office buildings, homes, restaurants, shops, entertainment sites, cultural loops and open spaces near the Diridon train station and SAP Center where the search giant could employ up to 25,000 tech workers.
“The Greyhound site is a good location for residential,” Staedler said. “A larger residential population is desperately needed in downtown San Jose.”