SAN JOSE — San Jose State University says it will buy a one-time hotel tower by the end of 2025 as part of a game-changing deal to create student housing in the highrise and widen SJSU’s commitment to the downtown.
Newly reviewed public documents show SJSU has signed a lease that expires in 2056 for a former hotel highrise next to the Signia by Hilton San Jose hotel tower at 170 South Market Street in downtown San Jose, part of a $113 million deal to convert the building into student housing.
The university will use the empty tower to house 700 to 800 of its students starting in the fall of 2024 in a new Spartan Village that’s expected to bring greater vibrancy and lively activations to downtown San Jose.
The rental agreement began on Nov. 16. Documents outlining the lease were filed the next day, files at the Santa Clara County Recorder’s Office show.
The university, however, is determined to become a permanent owner of the tower decades before the lease runs its course.
“To be very clear, we will be exercising our option in month 25” of the leasing deal, Charlie Faas, SJSU vice president for administration and finance, said in a text message he sent to this news organization on Monday. The 25th month of a lease that began in mid-November 2023 points to a purchase timeframe of around December 2025.
Throckmorton Partners, a Bay Area real estate firm, paid $73.1 million to buy the tower and immediately leased it to San Jose State University.
The university not only has an option to buy the highrise but it also has the right of first refusal to purchase the building should some other party emerge with an offer to purchase the structure.
“San Jose State University has always had a long-term outlook for the downtown and this adds to that,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.
In addition to the $73.1 million purchase price, another $40 million will be spent on renovations, financing and other endeavors to prepare the tower for student housing, Faas told this news organization.
Faas now believes the impact of the university will extend well over a mile from the campus to the Diridon train station on the western edges of the city’s urban core.
“Our campus is all of downtown San Jose,” Faas said. “Our students are all over this city.”
In the coming months, students who have been admitted for the 2024-25 academic year will receive information about their housing options, including for the Spartan Village on the Paseo in what will be the former hotel tower.
“Plans include a major renovation of the lobby and second-floor mezzanine spaces into a student-centric environment to support social activities and programs,” SJSU said in a prepared release. “Amenities will consist of an expansive dining area and a community kitchen, a fitness center, a games room, co-learning spaces and a study lounge in the sky bridge” that crosses over The Paseo.
The new student housing on South Market Street will help activate The Paseo all the way to the edges of the university’s main campus.
“SJSU always has been and will be a major driver for the success of downtown San Jose,” Staedler said.