The gleaming Three Sixty Residences in downtown San Jose rolled out with price tags starting at $500,000 at a time when the housing market was crashing. The result is 213 units and a completely empty tower. Three other downtown high rise developments, the Axis, City Heights and the 88, are slowly filling up, but not the Three Sixty.
David Contreras, a real estate consultant specializing in high rise living, says the 360 was not upfront about demand.
"I think that they didn't get as many offers as they might have had they just been honest with people and let them know that they're not half sold out," he said. "They were looking for people to make offers on their units."
Enter "Plan B." Kennedy Wilson bought the property at a foreclosure sale last month and asked city leaders to allow the Three Sixty to convert to rentals.
"It's good to get the building activated. So, I think it's a really good step that they're going to cover incrementals, because we know it'lll fill up quickly," Mayor Chuck Reed sayid. The redevelopment agency originally sold the Three Sixty site to the developer for $10 million. $8 million was paid up front with the rest of the bill due when the condos sold. The agreement calls for remaining money to be paid off like this: $250,000 now and the rest when market conditions change and the "For Sale" signs come out again, perhaps in five years. The idea is that whether they are owners or renters, people living in the Three Sixty will support downtown businesses.
"So, there will be no loss to the taxpayer. This is a win-win, both for the downtown and for our taxpayers," San Jose Councilmember Sam Liccardo said.
The marketing of the Three Sixty is about to come back to life and the big question is once again "How much?"