Key San Jose site near big malls avoids foreclosure, goes up for sale

SAN JOSE — Two key properties across the street from a big San Jose mall are up for sale and could become the site of a new office tower, medical highrise, or hotel.

The sites are located at 2812 and 2850 Stevens Creek Blvd. in San Jose and are across the street from Westfield Valley Fair mall and down the street from Santana Row.

The 2850 Stevens Creek site is already approved for the development of an 11-story hotel and now is occupied by a gasoline station.

In October 2021, the property fell into default on its mortgage and was facing foreclosure and was even scheduled to be auctioned off to the highest bidder.

Cambria Hotel, a 175 room, 11-story hotel at 2850 Stevens Creek Blvd. in San Jose, concept. (Henry Cord)

However, the property owner, an affiliate that’s headed by Adeel Mahmood, principal executive with Villa Developers & Investment, cured the default and rescued the property from foreclosure. Mahmood’s group still owns the site.

David Taxin, a partner with Meacham/Oppenheimer, a commercial real estate firm, came up with the idea of ​​attempting to sell both the 2850 Stevens Creek site and the adjacent parcel at 2812 Stevens Creek in a package deal.

Together, the sites total 1.3 acres, according to Taxin. If the properties were to be acquired by the same buyer, a high-density development could be possible on the newly fashioned site.

“We went to the neighbor and we are marketing the two parcels as a single development site,” Taxin said.

The adjacent site is owned by an affiliate headed up by the Sal Cala family, a real estate investment group.

“The parcels together would give you a property where you could go at least 10 stories with a building,” Taxin said.

A combined site would wield a high-profile location fronting on Stevens Creek between South Monroe Street and South Clover Avenue.

“The parcels together give us a much broader audience,” Taxin said.

San Jose city officials are seeking higher densities along the stretch of Stevens Creek Boulevard between Interstate 880 and Winchester Boulevard.

In the package deal scenario, the combined site would be offered for sale at $25 million, according to Taxin.

The 2850 property where the hotel is approved, if sold separately, would be offered for $12.8 million. In recent years, Mahmood attempted to sell the hotel site for about $20 million.

However, the onset of the coronavirus devastated the lodging and travel sector. The economic shocks from the deadly bug have in many instances eroded the value of existing hotels. That dynamic has made the development of new hotels less feasible.

“We’re talking to some big-name medical tenants out there to see if someone is interested or needs something in this area,” Taxin said.

Plus, the site could be viable as an office tower for a tech company.

“A big office building would be similar to what is being done at Santana Row with some big tech tenant,” Taxin said.

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