Developer dumps offices, eyes housing, seeks San Jose property sale

Commercial property at 335 South Winchester Boulevard in west San Jose.

SAN JOSE — A real estate company has scuttled a proposal to build a big office building at a prime San Jose site and has now pivoted to a plan for housing — even as it seeks to sell the property.

The flurry of activity, along with the switch to housing, is a reminder of the weak state of the Bay Area office market and the shift to residential projects.

335 South Winchester Boulevard in west San Jose, a restaurant site, shown within the outline. Boundaries are approximate.The potential development at 335 South Winchester Blvd. in San Jose is across the street from the Santana Row mixed-use neighborhood and around the corner from the Westfield Valley Fair mega mall.

An affiliate headed up by San Mateo-based HPL Development owns the 0.7-acre property, which was valued at $7.8 million as of January 2023, according to the Santa Clara County Assessor’s Office.

The property is now for sale, according to a marketing brochure circulated by Alliance Bay Realty brokers Wendy Leung and Joe Bega.

Initially, an office building was proposed for the site but housing is now the latest plan for the property.

“The city approved an office building for the site, but the entitlement expired,” Bega said in an interview. The entitlement expired in early January.

The new housing proposal envisions a residential building with about 75 apartments and ground-floor commercial space, Bega said.

The housing entitlement process has just begun with a preliminary proposal to San Jose city planners.

Separately, HPL Development is attempting to sell the property, which for decades was the site of Khanh’s restaurant.

The initial asking price was $25 million. HPL has since cut the price to $20 million, according to the marketing brochure. The current level of buyer interest wasn’t immediately clear.

One major selling point for the property is its proximity to Santana Row and Valley Fair. It’s also near the Winchester Mystery House and freeways leading to the Santa Cruz Mountains and Monterey Bay.

“With its prime position, residents enjoy easy access to urban amenities, cultural treasures, and natural beauty,” the Alliance Bay Realty brochure states.