JV Adds 290 KSF Office Project at San Jose Campus

Coleman Highline. Image courtesy of Hunter Storm

Coleman Highline, a 1.7 million-square-foot mixed-use project in North San Jose, Calif., is about to enter a new construction phase. Developers Hunter Storm and Sansom Partners intend to add a 290,000-square-foot office building to the master-planned complex, according to The Mercury News.

The newest addition to the live-work-play destination will be located at 1185 Coleman Ave. on a 4.5-acre site. Work on the project—labeled Building 6—is expected to start in the third quarter of 2022.

Coleman Highline is taking shape immediately next to the Norman Y. Mineta San Jose International Airport, some 5 miles from downtown San Jose. At full buildout, the development is set to encompass eight mid-rise office buildings totaling more than 1.5 million square feet, 1,600 residential units, two hotels, as well as four amenity buildings with ample retail and dining space. Architecture firm Gensler is the designer of the entire project.

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Since the project’s debut in 2017, the partnership delivered most of the planned office space. In 2020, two new office buildings totaling 357,000 square feet and a 27,000-square-foot amenities structure were completed. Tech-company Roku Inc. is currently anchoring the location, taking up more than 700,000 square feet at Coleman Highline. In 2020, BCORE Coleman Owner, a Blackstone affiliate, paid $275 million for the Roku-leased location.

In December, AGC Equity Partners purchased Phase II of Coleman Highline for $780 million, marking last year’s largest office sale in San Jose. Totaling 655,577 square feet across two buildings at 1199-1193 Coleman Ave., the property was originally designed as a lease-to-purchase Verizon campus, but part of the space is currently occupied by Yahoo.

Tech-driven office sector

The developers told The Mercury News that demand for state-of-the-art office locations, particularly from large tech companies, prompted them to move forward with the project.

Coleman Highline is just one of the large-scale mixed-use projects Hunter Storm is bringing to Silicon Valley. Last month, the Cupertino-based developer announced Cityline Sunnyvale is entering the last construction phase. Hunter Storm is developing the mixed-use project in partnership with Sares-Regis Group of Northern California and a series of institutional investors. Upon completion, the development is slated to bring more than 1 million square feet of office space, as well as residential and retail  space, in the heart of Sunnyvale’s financial district. 

Despite office vacancy in the Bay Area reaching 16.1 percent in December—60 basis points above the national vacancy rate—the sector continues to be supported by the presence of large tech companies, according to CommercialSearch data. Case in point, one of last year’s largest office leases in the country was at a Sunnyvale location. Meta, the recently founded parent company of Facebook, leased a 719,037-square-foot, four-building office campus owned by Tishman Speyer.