SAN JOSE — Two famed development firms, Peery Arrillaga and Duke Realty, have struck a deal for the purchase of a choice site of empty land in south San Jose.
Duke Realty has bought from Peery Arrillaga 15.1 acres of land near the interchange of U.S. Highway 101 and Blossom Hill Road in south San Jose, public property documents filed on Oct. 1 show.
Acting through an affiliate, Duke Realty paid nearly $40.2 million for the parcels, according to a deed filed with the Santa Clara County Recorder’s Office.
The two chunks of vacant land have addresses of 5977 and 6001 Silver Creek Valley Road in San Jose, files at the County Assessor’s Office show.
Peery Arrillaga, a legendary and savvy Bay Area development company, bought the land in 1995, according to the Nexis database.
The Peery Arrillaga firm, co-founded by John Arrillaga and Richard Peery, captured a hefty profit on the land the company has owned for decades.
The amount the Peery Arrillaga firm paid when it obtained the land in 1995 wasn’t disclosed. But the most recent assessment on record, current as of mid-2021, shows that the two parcels have a combined value of $356,900.
Peery Arrillaga has not applied for any development permits for the site, according to San Jose city planning records.
Indiana-based Duke Realty has increasingly become an active developer and property investor in the East Bay and San Jose.
“Duke Realty continues to invest heavily in coastal markets, specifically on the West Coast, where there is a need for state-of-the-art industrial space and opportunities for infill redevelopment,” said Drew Hess, market leader for Duke Realty’s Northern California and Seattle-area operations.
In December 2020, Duke Realty paid $40.6 million for a 17-acre San Jose site at 5853 and 5863 Rue Ferrari. A massive industrial complex totaling 303,100 square feet is being planned at that site.
Duke Realty also intends to develop a modern delivery, logistics, packaging and industrial center at 2256 Junction Ave. in north San Jose, city documents show. Amazon is thought to be interested in operating at this site.
In early 2021, Duke Realty bought two industrial buildings in Oakland that were recently modernized and 7.9 acres of land in Richmond.
For several years, online commerce has boomed amid shifting consumer habits and in the wake of the coronavirus outbreak.
These trends, in turn, has intensified demand to own and operate logistics, package handling and distribution centers that are the platforms for online commerce.
“As we continue to see low vacancy rates in Northern California, a strategic growth market for Duke Realty, we will pursue infill locations where we can redevelop and provide tenants with the best-in-class facilities,” said Michael Chukwueke, a Duke Realty vice president for acquisitions and development.