SAN JOSE, Calif.--(BUSINESS WIRE)--Urban Catalyst, Silicon Valley’s most active Opportunity Zone Fund, has started demolishing the site of its Keystone project, a 176-key Marriott TownePlace Suites that’s Downtown San Jose’s first extended-stay hotel.
Demolition crews began on Feb. 16 to raze the project site at the northeast corner of West San Carlos and Josefa streets to allow for the construction of the eight-story hotel. Vertical construction will start next quarter. The project is slated for completion in the first quarter of 2025.
Keystone is three blocks from the global headquarters of Adobe, historically a large user of extended-stay rooms, and will accommodate businesspeople looking for long-term stays. The hotel will provide rooms to construction workers to help Google build out its planned San Jose campus and aid other downtown developers that import their construction labor.
The project’s proximity to Diridon Station, the city’s main transit hub, and the SAP Center means performers at the latter and the center’s event attendees will have a place to stay near ample mass transit. All of Keystone’s guest rooms will have full kitchenettes, with units ranging from 370 to 830 square feet in size.
Although domestic business travel hasn’t recovered to 2019 levels, the gap is narrowing. Business travel was 71 percent of pre-Covid levels in the third quarter of last year, according to data from American Express Global Business Travel. That’s double what it was during the same quarter in 2021, the data show.
Trips through San Jose International Airport are also trending up after bottoming out in 2020. The airport handled more than 11 million passenger trips last year, up 54 percent from 2021, according to data San Jose International published last month.
Urban Catalyst held in January a groundbreaking ceremony for Keystone attended by a select group of invitees, including San Jose Mayor Matt Mahan and San Jose City Councilmembers Dev Davis and Omar Torres. Urban Catalyst Founder Erik Hayden said during the event that the start of Keystone’s vertical construction marked an important milestone for the company, as it’s the first ground-up project to go vertical in the developer’s eight-project Opportunity Zone portfolio.
“Even in the face of tough economic times, like right now, we’re still able to move forward,” Hayden said.
Councilmember Davis, whose council district includes the Keystone site, said during the ceremony that every time she’s asked Urban Catalyst if it will be able to complete its Opportunity Zone developments, she’s received a “strong commitment from all of you that you’re continuing to move forward with all your projects.” Torres, representing District 3 and sworn into office last month, said during the ceremony that one of his first meetings as a council member was with Team San Jose, the city’s convention and visitors bureau. Team San Jose is “very concerned” that major conferences aren’t coming to San Jose due to a shortage of hotel rooms, Torres said.
“Team San Jose said, ‘Help us build these hotel rooms, and we’ll make it work,’” he said. “We need our civic auditorium to be packed every weekend with conferences and concerts. I pledged to do that, so thank you very much for investing in our downtown,” Torres said to Urban Catalyst’s Hayden and Josh Burroughs, the company’s COO, in front of a crowd of ceremony attendees.
Keystone is one of three projects Urban Catalyst is doing on the same block-long stretch of West San Carlos Street to complement Google’s 80-acre project surrounding Diridon Station. The other two, a senior living facility and an apartment complex, support the street’s ongoing revitalization and the area in and immediately around Google’s development site. Urban Catalyst’s Hayden has worked on several large development projects on the street over the past 15 years, comprising about 1,000 apartment units.
About Urban Catalyst
Urban Catalyst is a fund manager and real estate developer with decades of experience in developing ground-up projects and owning and managing stabilized, income-producing assets. The company’s home market, San Jose, was last year named the best city in the U.S. for attracting innovation-oriented industries by real estate services firm JLL. Moreover, Bloomberg reported in 2020 that Silicon Valley has a better chance of recovering faster from the pandemic than any other region in the country.
For more information, visit urbancatalyst.com.
