SAN FRANCISCO, CALIFORNIA (August 9, 2019) – Nathan Prouty, Andrew Slaton and Briana Harney of NorthMarq’s San Francisco office secured debt and equity for the development of The Firestone, a mixed-use project located at 477 S. Market Street in downtown San Jose’s SoFA District.
Over the course of a year, NorthMarq worked closely with the project developer, Acquity Realty, Inc. (“Acquity”), led by Dennis Randall and John Pringle, to arrange a joint venture partnership and senior debt. PCCP provided a construction loan with the remainder of the capital coming in the form of joint-venture equity from Cigna Investment Management (“Cigna”) and Acquity. The 6-story mixed-use development will provide 130 apartments with a shared rooftop terrace and 6,725 sq. ft. of ground floor retail that will feature a restaurant/bar.
“The Firestone is a well-conceived and thoughtfully designed project in one of San Jose’s most popular and vibrant neighborhoods. A ground-up deal at this stage of the cycle posed some challenges with rising construction costs and healthy supply of new product, but we were able to match up Acquity with a likeminded institutional partner that shares an optimistic long-term outlook for Downtown San Jose. The project designed as mid-rise Type III construction positioned it well for immediate execution, while the bulk of projects in the pipeline are high rise and simply don’t pencil right now,” noted Prouty. “This project had broad appeal and we canvassed the market, going to over fifty lenders and investors to identify the best partners for our client. Both Cigna and PCCP are very active in the area, have been a great fit from the start, and place a high value Acquity’s local knowledge and expertise. Groundbreaking is imminent and we are excited to see the project come to life.”
“Our San Francisco based team led by Nathan Prouty, Andrew Slaton and Briana Harney, accepted the challenge of representing a development start up sourcing both equity and construction debt in market arguably past its cyclical high point. We needed to move quickly to cap significant increases in entitlement costs and projected increases in construction costs,” said John Pringle, managing partner for Acquity. “Our NorthMarq team brought a first-rate Life Company investor to the partnership and multiple construction debt options. Execution and organizational support by Northmarq to our firm were exceptional.”
The Firestone project, near the corner of South Market and Balbach streets in the city’s SoFA district, will become the newest large development in downtown San Jose once it gets underway. Adobe’s expanding headquarters are within a few blocks of the property as is Google’s to-be-developed headquarters at the Diridon CalTrain Station. The hip SoFA District features a mix of theaters, restaurants, arts groups, media businesses, and architecture firms. The Firestone will have convenient access to Interstate 280, the Convention Center VTA light rail station, and CalTrain’s Diridon Station.