SAN JOSE –Investors have bought a ground-floor section of the historic Bank of Italy building in downtown San Jose, leading some local experts to suggest the investment group may eventually attempt a top-to-bottom revival of the striking office tower.
The 14-story building, constructed 90 years ago, was the one-time site of a branch of the Bank of Italy, a bank founded by Amadeo Peter Giannini and a forerunner of Bank of America.
Cadre Urban on Oct. 12 paid $3.2 million for a section of the ground floor with an address of 8 S. First St., according to multiple county property records.
At present, the office tower has a condominium type of ownership, which means it has multiple owners, county records show. Perched on the corner of East Santa Clara and South First streets, the building could offer a significant opportunity for a new owner.
“If someone were to aggregate the building into a single ownership, that could be a tremendous asset in downtown San Jose,” said Mark Ritchie, president of San Jose-based Ritchie Commercial, a realty brokerage. “This building is a landmark; you see it in all the shots of the downtown skyline.”
County records indicate that this month’s deal is the first one in the Bank of Italy building by the new owners, who paid cash for the ground-floor section of the tower. The downtown San Jose icon was built in a Mediterranean Revival Beaux Arts architecture style and has a distinctive cupola for its spire.
“This is one of the most important buildings in downtown San Jose,” said Bob Staedler, principal executive with San Jose-based Silicon Valley Synergy, a land-use and planning consultant.
The investment group has a number of of the condominiums in the Bank of Italy building under contract, said Gary Dillabough, a managing partner for two investment firms, Alameda-based Navitas Capital and Menlo Park-based Westly Group. Dillabough said he is working with the Cadre Urban investors involved in the Bank of Italy purchasing effort.
“It is a great building,” Dillabough said Friday in emailed comments.
The Bank of Italy building was, from the time of its 1926 construction until 1970, the tallest building between San Francisco and Los Angeles.
“It would be great if someone can come in and polish this gem,” Staedler said of the Bank of Italy tower.
The building’s tenants are primarily an array of law firms, tax preparation concerns and financial planners. Several small tech firms are also located in the office tower.
“To undertake any significant improvements in the building, it would have to be under a unified, single ownership,” Staedler said.
Ever since Google and its development ally Trammell Crow began to collect properties in the Diridon Station and SAP Center area, potentially for a vast Google transit village, a growing number of investors appear to be eager to jump into downtown San Jose.
In June, Blackstone Group bought the 236-room Hyatt Place hotel in a $65 million deal. That same month, a South Korea-based company paid $64 million for the historic Westin San Jose — commonly known as the Sainte Claire hotel.
East Coast investors bought a downtown San Jose office building in July for more than $80 million, a record price per square foot of $509 that some observers believe shows the influence a proposed Google village is already having on activity in the city’s urban core.
A potential upgrade of the Bank of Italy building would extend that investment activity. The old tower is a San Jose Historic Landmark and part of a Downtown Historic District in the National Register of Historic Places.
“I hope we can find a way to restore it to its past glory, but it requires a lot of work,” Dillabough said.
