SAN JOSE — A huge residential development that would create nearly 600 homes in San Jose next to a train station has landed a crucial development loan that clears the way for construction to begin within weeks.
The housing development, located at 1330 S. Bascom Ave., has received a construction loan totaling $284 million, according to Newmark, a commercial real estate firm that arranged the vital financing.
The loan will enable the project’s developers, Bay West Development and Forum Real Estate Group, to build and complete the housing, Newmark said.
The construction loan is a welcome counterpoint to the sour financing picture for countless commercial real estate projects during a time when the coronavirus has unleashed economic woes and uncertainties worldwide.
Financiers turned queasy about providing construction funding during the worst of the coronavirus outbreak. Lenders now are becoming more active, said Matt Gingery, a principal executive with Bay West Development.
“The capital markets tightened up during COVID, but as rents and normalcy returned in the last six months, we saw great interest in the project,” Gingery said.
Newmark executives Ramsey Daya, Chris Moritz and Travis Bailey led the efforts to arrange the construction financing for the project.
AustralianSuper, one of Australia’s largest pension and retirement funds, provided the construction financing, according to documents filed on March 14 with the Santa Clara County Recorder’s Office.
The residential development will consist of 590 apartment units. The housing project is expected to be known as The Maxwell.
“The Maxwell is one of the largest multifamily housing projects to ever break ground in the West Valley,” said Daya, who is vice chairman of Newark’s debt and structured finance unit.
The new housing development is slated to sprout on a 4.5-acre site next to the Bascom light rail station in west San Jose.
“The Bascom Station development project is an outstanding example of a mixed-use, transit-oriented development project,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.
The residences are being built on a portion of a 6.4-acre site that for decades was known as Dick’s Center. Zorba the Greek restaurant also had operated on the triangle-shaped site.
“San Jose needs to approve more projects like this,” Staedler said. “The vacant commercial buildings were unusable.”
The project’s location next to the light rail stop means residents can reach downtown San Jose and downtown Campbell in about seven minutes by riding the train, according to Newmark executives.
Proponents hope the new apartments will help address a lack of housing in the western Santa Clara Valley.
“We feel like the West Valley has been undersupplied with new housing,” Gingery said. “We are thrilled to be able to build a landmark transit-oriented development here.”