Two proposed downtown San Jose housing developments have landed new loans to help steady their finances as work on breaking ground on the projects continues.
Urban Catalyst, a developer that is active downtown, obtained a total of $18.9 million in two loans from real estate lender Avatar Financial Group, documents filed on Sept. 24 with the Santa Clara County Recorder’s Office show.
Among the projects, Urban Catalyst received $13.9 million in financing for undeveloped parcels where the proposed Icon and Echo residential towers at 147 East Santa Clara St. will be built.
The developer also obtained $5 million in financing for Gifford Place, an unbuilt senior residential development at 470 West Santa Clara St., county records show.
The Icon and Echo development, as currently envisioned, would produce 600 residential units, according to Urban Catalyst. The Gifford Place project would create 169.
“It’s always nice to be able to recapitalize your projects,” said Erik Hayden, founder and managing partner with San Jose-based Urban Catalyst.
The refinancing offers a hopeful outlook for the housing development market, he said.
“There’s still a lot of faith in the ground-up development market in Silicon Valley,” Hayden said. “There is still a lot of strength in this area.”
he recent cut in short-term interest rates orchestrated by the Federal Reserve and the prospect of more cuts in interest rates have encouraged developers, according to Hayden.
“We think we are at the beginning of a better cycle with the cut in interest rates,” Hayden said. “People are sensing a turnaround.”
