SAN JOSE — It takes more than financial crisis, recession, coronavirus and economic uncertainty to deal a permanent blow to the fate of San Jose’s Santana Row, the iconic village celebrating its 20th anniversary.
Santana Row’s primary developer and owner, the Federal Realty Investment Trust, has spent much of the last 20 years developing various types of real estate, and the center’s economic potential could ruin a real estate venture. It has helped avoid pitfalls.
Santana Row’s 20th anniversary, which officially celebrates on November 7th, is a reminder that Federal Realty created the 42-acre village for more than just a short-term operation.
Jan Sweetnam, president of Federal Realty’s western division, which includes San Jose Village, said: “We’re thinking short-term, medium-term, and long-term. We’re thinking about where we stand in San Jose and Silicon Valley.”
With 100 commercial properties, Santana Row does more than just offer patrons the retail and restaurants staples of major malls. The open-air complex has evolved into a full-fledged village that includes housing, office space, entertainment venues and hotel facilities.
“The secret sauce is the right blend of all product types,” said Collette Navarrette, senior director of marketing at Federal Realty. She says, “There are retail and restaurant spaces, and a mix of residences and offices.
But the sources that helped bring this San Jose neighborhood to life are more than a collection of different types of real estate.
An 11-page research paper written on Santana Row in 2010 suggests that Santana Row’s street grid is also a key factor in the center’s success.
An important aspect of Santana Row’s street layout and orientation caught the eye of Pallavi Saxena, a transportation planner for engineering firm Hatch Mott MacDonald, in 2010.
“All streetside activities on Santana Row are located facing the street,” Saxena wrote in a paper on the center. “This design feature strongly promotes a pedestrian environment and gives users a sense of security.”
From the outset, Saxena argued in the paper that Santana Row was made with key elements of a successful neighborhood.
“Pedestrian streets are designed in such a way that they tend to be the primary civic space in the neighborhood,” Saxena writes in the research paper. “Housing, retail, human activities, events and open restaurants are all oriented to the street.”
Cities such as Mountain View and San Ramon are also building centers that experts say are similar to Santana Row in an effort to create new neighborhoods.
Most recently, the coronavirus posed perhaps the most unique and complex challenge for Santana Row. But even in this case, Santana Row’s open-air, pedestrian-friendly environment created a path to survival—and even success.
Santana Row patrons were able to dine and pick up merchandise at designated outdoor spots during a temporary ban on indoor shopping and dining due to government regulations.
In 2020-2021, al fresco dining has become a familiar scene at Santana Row. The scene continues in 2022, when indoor dining resumes.
Santana Law’s response to the coronavirus wasn’t the first time Federal Realty has made an apparent setback to a successful gambit.
In the early days of Santana Row, the center struggled to recruit retail tenants for the second and third floors of the building on and near Stephens Creek Boulevard.
Upstairs retail stores often function in verticals such as Manhattan, but are usually shunned by California consumers, except in limited circumstances. Three floors of retail is almost unheard of in the Golden State.
“Around 2004 and 2005, we were having a really hard time renting retail space on the second and third floors,” recalls Sweetnam. “We ended up converting the upper floors of the retail store into an office space. That’s when the epiphany came that office users would love to be in a place and environment like this.”
Federal Realty has attracted technology companies to develop two modern office buildings on the southern end of Santana Row.
Splunk leased one of the buildings and NetApp leased the other as the company’s headquarters.
Federal Realty strengthens its office development with the One Santana West building across from Santana Row.
The evolution of Santana Row continues. In April 2022, Federal Realty developed a major renovation plan that could add four new office towers to his Santana Row.
“I feel it’s inevitable that Santana Row will be dense,” Sweetnam said. “The idea is to bring in more customers who want to be here. We are planning for the future and we feel the future is still very bright.”
Sparkling new office buildings and their tenants continue to attract attention, but Santana Row continues to gain retail and restaurant tenants.Santana Row recently revealed that it has acquired 15 merchants.
“Yes, we still have e-commerce, but with top brands on Santana Row, we can give our customers a great experience,” said Navarette. “Over his 20-plus years, we have watched Santana Row evolve and thrive. A new area was born.”