Pruneyard’s Big Plans Broke Big Ground This Week

Most of you know that it’s not just the homes of Silicon Valley that we love – but the lifestyle & community too! You’ve no doubt heard the big news about the groundbreaking ceremony in Campbell’s iconic Pruneyard this week, so we thought we’d share the highlights of what to expect as well as the potential impact on local real estate.

WHAT HAPPENED

• Commercial firm Ellis Partners purchased the 27-acre center in October 2014 for $280 million.
• After two years of working with the City of Campbell on revitalization plans, a round of approvals was granted on October 18^th…allowing for preliminary plans to proceed.
• January 18, 2017 marked the project’s first official groundbreaking – with both city officials and Pruneyard business owners present.

WHAT CAN WE LOOK FORWARD TO

• New market dining concepts, new retailers including books & beauty, the renovation of Camera Cinema 7 (including another level, Sony 4K projection and Dolby surround sound) and Peet’s Coffee.
• Improved pedestrian walkways, new landscaping, additional gathering places and modern, improved signage.
• With regards to facts and figures, expect the construction of “…up to four new retail buildings with between 35,000- to 50,000-square-feet of additional space, a 100,000-square-foot, five-story office building and 680 new parking spaces” according to the Commercial Property Executive.
• Grocery shoppers beware: Trader Joe’s will be expanded in size by 15%.

WHY NOW

• Pruneyard had not been updated for over 20 years, and the tenant mix could benefit from some long overdue diversity which meets current community desires.
• Individual tenants have already begun large-scale improvements in an effort towards modernization, including the recently completed 12-month expansion of Trudy’s Bridal Salon and the mass renovation of the Doubletree Hotel by Hilton.
• Current plans are the ultimate goal of the purchase three years ago and the culmination of years of negotiations with the City of Campbell.

While the complete process of all construction phases is expected to take 10 years, you’ll start seeing physical changes to existing spaces this year, with public events and experiences growing in 2018 as part of project improvements. Perhaps the bigger question is what all of this means in the current housing market – as well as those to come?

In a year where sales prices are expected to grow at a slower pace, and where interest rates are expected to rise, it’s interesting to weigh the addition of such an amenity-minded commercial project in an already desirable neighborhood. In general, the addition of high-end, large scale commercial improvements can increase residential home values anywhere from 14-30% (according to SF Gate*). Rental prices are also likely to be impacted in the immediate area. With the local government receiving the benefit of a higher tax base, Campbell’s other long-awaited improvements (i.e. the library) could have a chance at funding and modernization too. The ultimate success of a large-scale revitalization is dependent on clear communication between the developer and citizens with proactive solutions for potential issues such as traffic, congestion, crime and pedestrian access and safety.

If you are an existing Campbell resident, you have every reason to believe that the return on your investment will continue to grow as does the area’s desirability. Just keep attending those city council meetings and watch those local ballot measures for related and collateral considerations. If you would like to be a Campbell resident, consider a step in the direction of growing your equity now (even in a small, entry-level residence) until you can afford the home of your dreams just a stone’s throw from the new Tin Pot Creamery (small-batch, organic ice cream – need we say more?!).

Silicon Valley life is anything but dull and boring, and you can expect more developments in this project – as well as others (look out Cambrian Plaza!) in the months and years to come. As long-time residents and steadfast market analysts, our commitment to you remains to help you achieve the lifestyle you deserve in the place you can’t wait to call home. If we can help you consider how local development is going to impact your present and future home ownership and investment plans – please don’t hesitate to reach out.

Cheers,

Mark & Jason

team@homesofsv.com

408-596-5526

Resources Used:

Iconic Pruneyard Center Slated for Renovation

Campbell: Pruneyard Shopping Center’s ‘dramatic transformation’ breaks ground

Ellis Partners Begins Revitalization of the Iconic Pruneyard Shopping Center

The Effects of Commercial Property on Residential Value

What Does That New Luxury Building in Your Neighborhood Mean for Your Home's Value?