Ridge acquired 111 Market Square in 4Q2016 with an institutional capital partner for a purchase price of $64,750,000 ($$202psf). The 320,559 square foot, two-building complex is located at the epicenter of downtown San Jose’s growth corridor, contiguous to the San Pedro Square Market. Originally developed in 1963-1965, Market Square is physically positioned to directly benefit from substantial private and public investment in the immediate vicinity with multiple private housing developments underway or recently completed, and City-sponsored investment into the public market to make the immediate area a pedestrian-friendly, 24-hour location with the downtown area.
The underpinning of the investment thesis consisted of the attractive acquisition basis at less than 50% of replacement cost for similar assets, coupled with a meaningful upside potential that would be captured through a significant capital and management repositioning program. During 2017-18, the buildings benefited from over $30 million in leasing improvements, exterior upgrades, new lobbies, building amenity improvements, upgrades to corridors and restrooms, and an upgrade to building systems. These capital projects enhanced leasing traffic, reduced expenses and allowed Market Square to compete effectively with the upper tier of the downtown market.