A 312-unit apartment tower near San Pedro Square in downtown San Jose has changed hands for $176 million, the latest sign that investors are circling back to the city's high-rise housing stock. Kennedy Wilson formed a joint venture with two partners to buy One South Market, a residential building at 1 South Market Street that has now sold twice in six years for almost the exact same price.
A Joint Venture With Two New Partners
Kennedy Wilson teamed up with Hulic Co. and Fuyo General Lease (USA) Inc. to acquire the property, according to Institutional Real Estate, Inc., which reported the three-party venture closed the $176 million purchase. The deal marks Kennedy Wilson's fifth joint venture with Hulic but its first partnership with Fuyo General Lease, the outlet noted. One South Market, built in 2015, includes 312 residential units averaging roughly 907 square feet alongside 6,534 square feet of fully leased ground-floor retail.
The tower sits close to major Silicon Valley employers including Adobe and Zoom, and offers access to Diridon Station, regional highways and San Jose Mineta International Airport, per the same report. A unit of Lakevision Capital, a real estate firm based in China, had owned the property and sold it to the Kennedy Wilson affiliate, according to The Mercury News. The Lakevision affiliate had paid $175 million for the same building back in June 2020, according to the article, meaning the property's value has barely budged over six years even as the new sale price edged past that earlier figure.
Price Lands Well Above South Bay Averages
The $176 million sale price came in 46.5% above the average per-unit price for completed South Bay apartment hub sales, the Mercury News reported, citing an estimate from Marcus & Millichap that pegged that average at $385,000. The newspaper's reporting frames the premium as a sign of investor confidence returning to downtown San Jose after a rocky stretch for the area's commercial real estate.
The sale is also notable timing-wise: it marks the third major downtown San Jose high-rise transaction in October alone, the outlet reported. That cluster of deals follows a similar pattern seen elsewhere in the neighborhood, where buyers have recently shown fresh appetite for both housing and office product despite mixed results.
The Grad and a Discounted Office Campus Round Out October's Deals
Just over a week earlier, a 19-story student housing tower called The Grad sold for $204.8 million, the Mercury News reported. That 260-unit building at 88 East San Carlos Street can accommodate 1,039 beds and sold on October 6 for about $787,500 per room — more than double the $385,000 average for completed South Bay apartment complex sales. The outlet has separately noted that student housing has picked up recently in downtown San Jose.
Not every recent deal fetched a premium, however. A three-building office campus at 1, 55 and 99 Almaden Boulevard, anchored by tenant Zoom Communications, sold for $82 million on October 8 to an affiliate of SFF Realty Partners in an all-cash transaction, according to the Mercury News. That price landed 54.7% below the campus's estimated January value of $181.1 million. Newmark brokers involved in that deal told the paper they still believe it points to rising investor interest in downtown San Jose as the broader market rebounds — even as the price itself reflected a steep discount from a prior estimate.
What It Could Mean for Renters
Apartment prices in the South Bay have begun to stabilize and rise, and rents are poised to trend higher, which could squeeze renters' pocketbooks, per the Mercury News reporting. That mirrors broader regional pressure: San Jose ranked 40th in Zumper's 2026 Renter Leverage Index, with its grade slipping from a C to a D, according to NBC Bay Area. Zumper suggested the South Bay's artificial-intelligence-driven economic boom could be contributing to a scarcity of rentals in the region, the station reported, as Bay Area renters more broadly face rising prices and fewer available units.
