Bay West Hedges on 2M SF Office Project in San Jose

Plans to replace a landmark electronics superstore in San Jose with a 1.9M SF tech office campus have been put on hold—and the project appears to be moving in a different direction.

Fry’s Electronics, an iconic store at 550 East Brokaw Road (with an entrance that is a replica of a Mayan temple), was supposed to be demolished this year to make way for the tech mega-campus.

In January, Bay West Development received approval from the San Jose Planning Commission to build a cluster of seven eight-story office buildings on the 20-acre site of Fry’s, which closed during the pandemic.

This week comes news that Newmark has been tapped to offer a lease for up to 124K SF of space at 550 East Brokaw. The marketing effort is being led by brokers Phil Mahoney and Joe Kelly of Newmark, who are shopping the side for industrial or manufacturing uses.

“It could be industrial, logistics, or light manufacturing,” said Mahoney, an executive vice chairman with Newmark, according to a report in the San Jose Mercury News.

The existing structures at the former consumer electronics store encompass 294K SF, including a warehouse and an office that served as the corporate headquarters for Fry’s–and the San Jose Sabercats arena football team.

The retail store, which opened in 1996, closed in 2021 due to the collapse of the Fry’s Electronics chain.

During the first three months of 2023, tech companies have cut a net total of 16,300 jobs in the Bay Area, according to seasonally adjusted estimates that Beacon Economics compiled from the state government’s monthly employment report, the Mercury News reported. Tech firms have been reducing their office footprints in the Bay Area and postponing ground-up development projects.

“There isn’t as much demand for office space right now,” Mahoney told the newspaper,” adding that Newmark’s team is “getting a lot of interest” in leasing the site for industrial or manufacturing use. The site is near the interchange of I-880 and East Brokaw Road.

The shift to industrial or manufacturing use would mark the third time Bay West has changed its mind about what it wants to do with the 20-acre site.

When the Campbell, CA-based developer acquired the property in 2019, it obtained full entitlements from the city to develop a Signature project that would encompass 590 apartment units and 230K of office space.

In addition to the seven-building office campus, the plans approved in January included two parking structures encompassing 1.6M SF that could accommodate more than 5,300 vehicles.

As planned, the development would have included two large open spaces as well as “paved office patios and miniature plazas.” However, the developers also said they would need to chop down 274 trees to make way for the project.

Bay West also is in the midst of developing Bascom Station, a mixed-use, transit-oriented project that is rising on a 7-acre parcel adjacent to the Bascom VTA Light Rail Station within an Urban Village Plan in San Jose.