The Irvine Company got a big boost in the Bay area apartment market last week, though it seems its entry into the San Francisco office market has been put on hold.
The Newport Beach-based real estate owner said last week it struck a deal to turn a former Sony Corp. office campus in North San Jose into a 1,800-unit apartment complex.
The company still is in the process of buying the site from Sony, Irvine Co. spokeswoman Jennifer Hieger said. Terms weren’t disclosed.
Work on the apartments could start in 2008, if zoning changes are approved. The 38-acre site contains 620,000 square feet of office space, which will be razed for the apartments. The plan is to build apartments around a 3-acre park.
Sony has been looking to move from the 15-year-old office complex, which it called “functionally obsolete.”
The electronics maker has been working with the Irvine Co. and the city “to devise a new plan for the site that will convert an outdated office complex into high-quality housing close to thousands of jobs,” said Max Gardner, president of The Irvine Company Apartment Communities.
Sony is staying in the area but downsizing, moving to a 164,000-square-foot facility previously used by Infineon Technology Inc. as its headquarters. Infineon, coincidentally, is moving to a 63,000-square-foot Milpitas office building owned by the Irvine Co.
The development will be the second apartment complex the Irvine Co. has built in San Jose. Its first one is just down the road from the Sony campus. That project, called North Park, has 2,700 apartments. The final 450 units should be done next year.
The company owns about 80 complexes in all, totaling more than 27,600 apartments.
The news of the San Jose apartment push comes as the company stepped away from a pricey office deal in San Francisco.
In June, the Irvine Co. was reported to be buying its first office building in the city.
According to real estate trade publication Commercial Property News, the Irvine Co. was said to be under contract to buy 560 Mission St., a 31-story tower also known as the JP Morgan Chase building.
The price was said to be more than $400 million, which likely would have set a per-square-foot record for a San Francisco tower.
The seller was National Office Partners LP, a venture of Houston-based Hines Interests LP and the California Public Employees’ Retirement System.
The San Francisco deal recently fell through, according to Bay area real estate sources. A reason for the about-face was not given.
Irvine Co. officials declined to comment.
It’s been an active year on the office acquisition front for the company, even without the San Francisco deal.
Earlier this year, the Irvine Co. closed on two high-rise office buildings in San Diego for a reported $450 million. The buy included San Diego’s marquee One America Plaza.
In OC, the Irvine Co. acquired the Newport Gateway buildings for about $215 million. It also snapped up the Irvine Center Towers complex for about $325 million and is building another 10-story tower at the complex.
