Developer Shifts Downtown San Jose Project to Market-Rate Units

URGENT UPDATE: A major shift is underway in downtown San Jose as developer Urban Catalyst has announced plans to pivot from senior housing to constructing a new 277-unit apartment complex at 313 Gifford Avenue. This decision comes as the demand for market-rate apartments surges, reflecting the current housing landscape where financing for senior and affordable housing remains challenging.

The proposed project will be an eight-story building, featuring all apartments offered at market rates, according to Erik Hayden, founder and managing partner of Urban Catalyst. This significant change aims to expedite housing availability in the area, responding directly to the pressing need for residential units in San Jose.

The urgency of this decision is underscored by recent trends in the real estate market. Urban Catalyst has been gaining momentum in its downtown development initiatives. Earlier in August 2023, an affiliate secured a hefty $112.5 million construction loan for another project—a 278-unit apartment complex at the corner of West San Carlos Street and Josefa Street.

Hayden noted, “The type of housing that is viable for getting financing is primarily market-rate multifamily apartments.” This statement highlights the ongoing difficulties developers face in securing funding for alternative housing types, such as senior and student housing.

In addition to the current project, Urban Catalyst recently celebrated the successful opening of a 176-room Marriott TownePlace Suites hotel at 495 West San Carlos Street during the spring of 2023. The hotel’s completion is part of the developer’s strategy to enhance the downtown area and provide essential amenities alongside residential options.

The decision to focus on market-rate housing is not just about financial feasibility; it reflects a broader strategy to address the community’s immediate needs. “It would be better for the community and our investors to build something sooner rather than later,” Hayden emphasized, signaling a commitment to swift development in a city grappling with housing shortages.

As plans move forward, the downtown San Jose area is set to undergo a transformation with the introduction of these much-needed market-rate apartments. Residents and potential renters alike will be watching closely for updates as the project progresses.

Stay tuned for the latest developments as Urban Catalyst gears up to break ground on this pivotal housing initiative in the heart of San Jose.