Properties vacated by Fry’s Electronics could entice investors, developers, tenants
North San Jose tech campus of seven office buildings and two parking garages at 550 E. Brokaw Road, elevated view, concept. The collapse of Fry’s Electronics, which closed the doors this week of all its stores, suddenly frees up 65 acres of real estate deemed to be in prime locations.
SAN JOSE — The collapse of Fry’s Electronics, which closed all of its stores this week, suddenly frees up 65 acres of real estate in prime locations.
San Jose, Fremont, Concord, Campbell, Sunnyvale, and Palo Alto all contain former Fry’s Electronics store sites, some of them sitting on huge parcels.
“These properties will help generate new buildings and new development,” said Dave Sandlin, an executive vice president with Colliers International, a commercial real estate firm.
Tech campuses, housing, auto dealerships, research, manufacturing — almost anything other than big-box retail — are among the kinds of projects that have been proposed, could be feasible or are on a community’s wish list for the properties.
“You could see developers or various users like tech companies going after these sites,” said Edward Del Beccaro, an executive vice president with TRI Commercial/CORFAC International, a commercial real estate firm.
At the north San Jose site on East Brokaw Road, city planners already are reviewing a proposal for a tech campus of seven modern office buildings that could total 2 million square feet.
What happens to the sites could be a process months or years in the making. Plus, the ultimate disposition of the properties could depend in part on what or who owns the sites.
The San Jose and the Fremont properties appear to be controlled by one or more members of the close-knit quartet that owned Fry’s Electronics.
Officially, and on paper, each of the six properties has a different owner:
— San Jose, 550 E. Brokaw Road, owned by Caracol Property Owner LLC, totals 19.7 acres. Caracol operates out of 600 E. Brokaw Road, which is the corporate headquarters of Fry’s Electronics. The Fry’s store there features a Mayan theme — and El Caracol is an observatory in the ancient Mayan settlement at Chichen Itza in Mexico. The assessed value is $20 million.
— Fremont, Osgood Road, owned by Wardenclyffe LLC, totals 10.1 acres. Wardenclyffe operates out of the 600 E. Brokaw address in San Jose. The Fremont store has a motif inspired by famed inventor and engineer Nikola Tesla — who designed and built an experimental wireless transmission tower on Long Island called Wardenclyffe Tower. The assessed value is $23.9 million.
— Campbell, 600 E. Hamilton Ave., 3.9 acres. F & F Campbell, which appears to be a group headed by local residents Roberta Feuerstein and Elliot Feuerstein, is the owner. The assessed value is $11.3 million.
— Sunnyvale, 1077 E. Arques Road, 13.6 acres. Wise Property Trust, a group affiliated with the family of Robert E. Wise, a high-profile film director, owns the site. The assessed value is $11.3 million.
— Concord, 1695 Willow Pass Road, 5.6 acres. Linsong LLC, headed by IFong Lin of Redwood City, is the owner. The assessed value is $20.2 million.
— Palo Alto, 3200 Park Road, 12.5 acres. SI 45, an affiliate controlled by developer Sobrato Interests, is the owner. The assessed value is $73.7 million.
“The Palo Alto site can easily be a tech campus,” Sandlin said. “Palo Alto is a fantastic site. It is near Stanford University and Stanford Research Park.”
Townhomes, beer gardens, apartment complexes, small office spaces, local retail, creative labs, and micro-manufacturing sites have all been touted by community groups and local officials as potential future uses of the Palo Alto property. Sobrato says it’s not interested in residential development.
The Concord property is across the street from an auto row.
“A lot of dealerships might want that property,” Del Beccaro said. “It’s got freeway visibility and is a few blocks from an interchange.”
The Fremont site could be well-suited for a tech campus, because of its size, if the former store site is bulldozed.
“You can easily build a million square feet on the Fremont property,” Del Beccaro said.
But the store building in Fremont could also be attractive enough in its current state that it could escape the wrecking ball.
“That Fremont building was constructed in a very similar way to how these advanced manufacturing buildings are being built right now,” Sandlin said. “Without a lot of additional capital, that could be rented for a significant amount of money.”
Similarly, the Campbell building could survive and become the site of a research and development operation, Sandlin suggested.
In contrast, the Sunnyvale property is near sites where developers and big tech companies such as Google have been actively building, buying, redeveloping, and leasing.
“You would probably want to build a very high-density office project at that site,” Sandlin said.
By far, the most ambitious plans that have surfaced publicly are in San Jose, where a full-fledged tech campus would sprout if the city approves the proposal from what appears to be an alliance of Bay West Development and one or more of the Fry’s Electronics owners.
“Fry’s Electronics may be gone, but these sites will generate new buildings and a lot of new jobs,” Sandlin said.