SAN JOSE — Santana Row has rebounded dramatically from COVID-linked ailments, the center’s executives say, citing an array of improvements at the iconic mixed-use complex.
Vehicle traffic has recovered nearly to pre-coronavirus levels, residential occupancies have jumped, and office leasing looks robust at the San Jose center, according to officials with Federal Realty Investment Trust, the developer and principal owner.
The remarkable rebound at Santana Row, one of the Bay Area’s destination retail and restaurant centers, was detailed by Federal Realty executives during a conference call with analysts this week to discuss the company’s first-quarter financial results.
The headliner accomplishment for the San Jose mixed-use complex so far this year was the decision by NetApp, one of the tech sector’s biggest names, to shift its headquarters to Santana Row.
Federal Realty believes the NetApp deal could herald a wider trend in the Bay Area of tech companies exiting San Francisco, as well as a general migration from the northern and central parts of the Bay Area to the south, which would benefit San Jose.
Tech companies hunger for amenities such as retail, restaurants, hotel facilities, entertainment and housing that abound in a setting like Santana Row, company executives said during the conference call.
“San Jose and Silicon Valley have become beneficiaries of urban and suburban migration from San Francisco,” Donald Wood, Federal Realty’s chief executive officer, said on the call.
The mixed-use complex also is seeing a rebound in visitors and shoppers, a rally in Santana Row activity that is reminiscent of the time before the advent of coronavirus-linked business shutdowns that began in March 2020.
“Santana Row car traffic, as measured by our parking systems, rose 69% in April compared with January and is fast approaching pre-COVID levels,” Wood said.
The residential component at Santana Row is also on the mend, executives said.
“Residential occupancy is back up over 95% after dipping to a COVID low point of 91% in the middle of last year,” Wood said.
Santana Row’s office components also look healthier in the wake of the NetApp deal to lease 301,000 square feet of offices at 700 Santana Row.
Another tech firm, Splunk, had previously leased that building but had yet to move in and terminated its lease to clear the way for NetApp’s rental deal. Splunk is still leasing a nearby building.
Santana Row executives also noted that NetApp mentioned some features specifically associated with the mixed-use center as reasons for the relocation to San Jose.
“The stated reason: To better facilitate a winning employee experience in a more connected space,” Wood said of the NetApp reasoning. “In other words, state-of-the-art facilities in a fully amenitized environment that makes retaining employees and hiring great talent easier.”
Santana Row is also attracting plenty of new restaurants and retailers through recently disclosed leases, Jeff Berkes, Federal Realty’s chief operating officer, said during the May 5 conference call.
Federal Realty also believes consumers are ready to spend in a big way.
“Pent-up consumer demand is real,” Wood said. “We see it in virtually all of our properties in all of our markets.”
