Major shopping center in San Jose finds new owners in a deal worth over $90 million

SAN JOSE – The Plant, a well-known retail and restaurant destination in San Jose, has been purchased for $95 million. The deal shows that despite the current difficulties, investors are still interested in commercial space in the Bay Area.

Arc Capital Partners and Milan Capital Management, two real estate investment firms, have teamed up to buy The Plant, according to documents filed with the Santa Clara County Registry of Deeds on Aug. 27.

The Plant, located south of downtown San Jose at the corner of Curtner Avenue and Monterey Road, is a well-known shopping center that is home to numerous well-known shops and restaurants.

The purchase agreement for The Plant indicates a low value for the property and reflects the growing problems of the Bay Area’s commercial real estate market.

The Plant’s three parcels, owned by Arc Capital and Milan Capital, were valued at $156 million in January 2024, according to Santa Clara County Assessor’s Office filings.

This means that the purchase price of $95 million was 39 percent below the estimated value of the parcels included in the deal.

“We are excited to partner with Milan to acquire The Plant, a property deeply embedded in a thriving community,” said Neville Rhone, co-founder of Arc Capital.

The decline in property values ​​throughout the Bay Area and the South Bay could pose major problems for local, county and public education agencies, as well as governments whose budgets depend significantly on the level of property tax revenue. A lower value of a property would tend to result in lower property taxes on the property.

Necessity Retail REIT bought The Plant just two years ago in 2022, paying nearly $175 million for the mall.

According to real estate brochures, the plant is located at 1 Curtner Avenue and has a total area of ​​650,500 square meters.