Oakland-based Blue Bottle Coffee has signed its first lease in the South Bay, for about 1,100 square feet in the historic building at 1 W. Santa Clara St. in San Jose’s downtown district
The shop will open early next year after the building’s current owners, San Francisco-based Lift Partners and Westbrook Realty Management, are finished with a major renovation of the property.
Blue Bottle is the building’s first confirmed tenant and will sit at street level at the bustling corner of First and Santa Clara streets, said Chris Freise, a partner with Lift Partners. The popular third-wave coffee shop has a history of livening up up-and-coming areas, which made them a natural fit for the space, he added.
“They are kind of what I call a ‘first-mover' type retail tenant,” Freise said. “A lot of [retailers] are a little more lemming like, where they follow after an area has hit critical mass, but Blue Bottle has had a lot of success going into locations early on.”
The new shop will be Blue Bottle’s 12th store in California, but its first south of downtown Palo Alto, where it has a location at 456 University Ave.
Lift Partners and Westbrook purchased the downtown San Jose property last summer for $16 million and began demolishing the inside of the more than 70-year-old building, which spent its first three decades as a J.C. Penney’s.
The group is essentially gutting the property and remaking it into office space that will appeal to creative users when it opens in January, Freise said.
Demolition has just wrapped up and construction is set to start in the coming months. The group plans to commemorate the building’s retail history with a blade sign that says “Penney’s” jutting off the building at the corner of First and Santa Clara streets.
Freise declined to share how much the renovation cost, but said the group was “putting a lot of money into the building.”
“Basically the only thing that won’t be new will be all of the great pieces that you want to keep, which are the floors and the old steel and the board-formed concrete on the inside,” he said.
By the time the building opens, Freise hopes an anchor tenant will have signed on to fill at least a couple of floors in the four-story, approximately 110,000-square-foot building. The property also has a basement level and an atrium.
The announcement comes just after San Francisco-based DivcoWest announced late last week that it had purchased for $14.4 million the historic downtown San Jose building across the street at 2 W. Santa Clara St. DivcoWest, is partnering with an investment group led by Gary Dillabough and plans to rehab the century-old, nine-story property that is anchored by a ground-level Walgreens, to accommodate smaller tenants.
The two building makeovers are all a part of a downtown San Jose “renaissance” that's already starting to attract new retail and office tenants that might otherwise go to San Francisco, Mountain View or Palo Alto, Freise said.
“Everybody has tried to create really cool and creative buildings – they’ve put outdoor barbecue pits and bocce ball courts and exposed ceilings,” he said. “But Silicon Valley’s only true stock of buildings that can compete with a San Francisco … or an Oakland in terms of character are in downtown San Jose, and particularly in this historic district.”