MarketCenter success

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Residents find retail powerhouse within reach

Its official name is San Jose MarketCenter.  Some know of it as Coleman Center.  Whatever it is called, it has been downtown’s retail powerhouse for more than a decade.

The 360,000-square-foot shopping center currently has 35 stores, many of which have been at the center since its opening March 2006.

“It’s a great center,” said Todd Oliver of Cushman & Wakefield, who has recruited tenants there since 2005.  “It is unusual to have so many long-standing tenants.”

“Most of the tenants are currently renewing,” added Sharlene Hassler, the local property manager for Chicago-based JLL (Jones Lang LaSalle, Inc.), an investment firm specializing in real estate that acquired the MarketCenter in July 2010 for
$85 million from developer Cousins Properties.

Trader Joe’s is one tenant signing up for another five years.  The grocer initially received a rent decrease through the San Jose Redevelopment Agency.

“The MarketCenter has a great mix of tenants and food choices,” Hassler said.  “One key to the center’s success was replacing the Chevy’s with BJ’s.  They are doing really well.”

Panera, Chili’s Sweet Tomatoes, Una Mas, L&L Hawaiian Barbecue are all counted among the original food tenants still doing business there.

Judging by the 2010 purchase price and constant flow of shoppers to popular retailers such as Target, Michael’s, Cost Plus World Market, Office Depot, PetSmart, Sleep Train and Marshall’s, the center has emerged as a downtown success story.

Current revenue and sales tax numbers for the center were not disclosed.  In 2005, then-RDA Director Harry Mavrogenesestimated that the project would generate hundreds of jobs and $1.7 million per year in sales tax revenue for the City of San Jose.

Other national businesses that been with the center since its beginning include T-Mobile, Chase (nee WaMu) and GameStop.  Several small privately owned businesses established in the center have also showed lasting power:  Blue Mango, Diamond Dental: Dr. Lannie Zarate-Reyes, America Nail / Tan and Blu Cocoon MedSpa.

The center is expanding by 8,000 square feet with a new building under construction.  It is expected to open in spring at the corner of Coleman Avenue and Taylor Street.  The expansion includes a new Blaze Pizza, an up-and-
coming chain of 150 stores nationwide partially owned by LeBron James, and a Wells Fargo Bank.  A third new space of 2,369 square feet is the only unleased spot at the center, Oliver said.

The buildout includes the addition of some much-needed parking.  “That portion of the center near Taylor Street (composed of Starbuck’s, Subway, Jamba Juice and El Pollo Loco) is extremely busy, especially at lunch and early evening,” Hassler said.

The additional parking won’t be ready for December, the busiest month for most of the stores.

“We have high visibility and a great location close to SAP Center and the Earthquakes,” said BJ’s Senior Manager Roddy Lopez.  “And, it’s a growing area.”  Open in 2013, this is the top-producing BJ’s in the region, he added.

People from a five-mile radius – including Santa Clara – go to the Market
Center, store managers confirmed.  It is the “go-to” center for downtown residents and employees.

“I am a big fan of the MarketCenter,” said Maya McCray, downtown resident.  “I love that it is across the street from Rotary Playground, which gives me the oppor-
tunity to set up play dates for my on and accomplish errands in one quick sweep.”