The new owners of the Target property on Stevens Creek Boulevard are using the 9.1-acre site as a springboard into the Northern California real estate market.
Earlier this month, Southern California-based Paragon Commercial Group announced the purchase of the 128,000 square-foot space at 20745 Stevens Creek Blvd. that is currently leased by Target Corporation.
The purchase is Paragon’s entry into the Northern California market. The El Segundo-based company owns and operates a portfolio of retail properties in Southern California.
“This is a marquee Silicon Valley property in one of the nation’s most competitive real estate markets. Acquiring a property of this caliber clearly demonstrates our commitment to building a lasting presence in the Northern California market,” said Jim Dillavou, principal of Paragon, in a press statement. “We are currently assessing additional acquisitions throughout Northern California, and we expect to announce further acquisitions in the region prior to the end of this year.”
Dillavou told this publication that Paragon is taking a “wait and see” approach to what to do with the Target property. The company is in talks with the city of Cupertino, but there are no plans to bring housing to the site as Paragon specializes in anchor store retail.
“From my meetings with residents and the city, residents really enjoy the convenience and the location and the use,” Dillavou said. “We love them as a retailer. There is room for additional density. In what form that takes, that will be a discussion with the community and Target.”
Paragon officials are saying that the Cupertino Target has historically been one of the nation’s top-producing Target stores. Dillavou added that the store is aging and could use an upgrade and probably does not need to encompass a full 9 acres. The site, Dillavou said, could potentially see the addition of more commercial uses.
Paragon is waiting for some kind of resolution with the city of Cupertino’s ongoing General Plan amendment discussions before developing a plan for the site. The General Plan process is well into its third year and has included numerous public hearings and hours of public testimony.
“We are not in a hurry, but we are working on it daily to make sure it’s the right use for that site,” Dillavou said. “We are in information gathering mode and will be for the next year or so. When we make a proposal to Target and the city, we want it to be a proposal that is well thought out to the best extent possible.”
Paragon owns, develops and manages retail properties throughout Southern California including Playa Vista, Woodland Hills, Rancho Mirage, Carson, Van Nuys and downtown Los Angeles. Some of Paragon’s properties have anchor tenants like Whole Foods, Gelson’s, Walmart, Toys R Us, Superior Grocers and Office Depot.
The Cupertino property was acquired from a private seller. Craig Zarro with Preferred Capital Advisors served as Paragon’s mortgage adviser on the acquisition. Paragon would not disclose the purchase price, but various media reports have put it at $51 million.
