Downtown West and Downtown San Jose: What Owners Should Watch

Own a condo, rental, or small building near Diridon Station? The next few years will bring big changes to Downtown San Jose that can shape your property’s value and day-to-day operations. It can feel hard to track every project, policy, and market shift. This guide breaks down what to watch, why it matters, and simple steps to protect your investment. Let’s dive in.

Downtown West: scope and timing

Google’s Downtown West covers about 80 acres around Diridon Station with planned office space, housing, retail, parks, and district utilities. The environmental filings outline up to roughly 7.3 million square feet of office, up to about 4,000 homes, and significant public benefits. You can review project scope and commitments in the official environmental record for the city’s approvals on CEQAnet.

Expect a long buildout with phased work. Early infrastructure and site preparation can last years, followed by staged construction. That means periods of street closures, noise, and changing parking rules, with benefits like new parks and retail arriving over time.

Transit projects to track

BART Silicon Valley Phase II will bring a BART station to Downtown San Jose. VTA marked a major milestone with a 2024 groundbreaking for tunneling and has outlined multi-year construction in downtown corridors. See VTA’s project updates and construction milestones in their groundbreaking overview.

High-speed rail at Diridon remains uncertain. State and federal funding and timing have been in flux, which can affect long-term station planning and rider volumes. Recent reporting outlines that uncertainty and potential funding risks here.

SAP Center and events

Event activity is a key driver for nearby restaurants, hotels, and parking assets. The City of San Jose and the Sharks extended the SAP Center lease in August 2025 and committed to arena investments. The agreement also includes event operations and parking protocols that help during Downtown West construction. Read the team’s announcement from the Sharks.

State housing changes

New state laws are reshaping what can be built near transit. SB 79, signed October 10, 2025, enables denser multifamily housing near qualifying stations and can limit some local controls, which may speed approvals around Diridon and future BART stops. See a summary of the bill’s scope and intent in this state policy report.

San Jose also adopted a path to sell accessory dwelling units as separate condo units, in line with state law. If you own a lot that can support an ADU, this is a potential way to create and sell a smaller home on your property. Learn more from coverage of San Jose’s first ADU sale approval here.

Market snapshot for downtown

Downtown rents have held near the top of Bay Area ranges. Recent trackers show median rents roughly in the low to mid $3,000s across unit types, with many one-bedrooms in the $2,700 to $3,200 range through 2025. You can review current estimates in this Downtown San Jose rent report.

Office space remains choppy. Post-pandemic vacancy is elevated in many downtown cores, and tenant demand has shifted by sector. Reviewers note uneven leasing and changing terms in 2025 filings, which is relevant if you own or occupy office space; you can see an example of market commentary in an SEC filing here.

What it means for owners

Homeowners

• Expect construction periods and changing traffic near Diridon and downtown corridors.
• Over time, new transit and amenities can support stronger resale potential, but short-term impacts may affect showing schedules and buyer perceptions.
• If you have space for an ADU, explore a build-and-sell or build-and-rent strategy under the city’s ADU rules.

Landlords

• Keep close tabs on allowable rent increases and just-cause rules for covered units under state and local law. For AB 1482 guidance, see the Law Foundation’s overview here.
• Consider lease timing around construction phases and event nights if your tenants rely on parking or loading zones.
• Watch rent comps monthly and adjust renewal offers to market conditions.

Small commercial owners

• Plan for temporary access and parking changes during BART and Downtown West staging.
• Review tenant mix and credit. Downtown leasing could remain uneven, so focus on essentials, services, and tenants with event and transit capture.
• Explore feasibility for office-to-residential or other adaptive reuse if vacancy persists.

Owner watchlist: 2025 and beyond

• Downtown West phasing: track city approvals, infrastructure triggers, and early work around Diridon.
• BART Phase II staging: monitor tunnel launch sites, detours, and any temporary easements near your block.
• SAP Center operations: stay updated on event schedules and parking protocols during construction.
• State upzoning near transit: confirm if your parcel falls in a transit-influenced zone under SB 79.
• Tenant rules and timelines: verify AB 1482 coverage and San Jose’s local just-cause and relocation requirements for any rent or notice action.
• Seismic and safety: inventory soft-story risks and watch for local retrofit guidance and potential funding. See context on program needs here.

Protecting value now

• Map your exposure. Note where construction routes, staging, or event traffic intersect with your property’s access and parking.
• Update your timelines. If you plan to sell or refinance, build in extra lead time for prep, showings, and appraisals during peak construction.
• Tighten your paperwork. For rentals, align notices, rent increases, and relocations with state and local rules. When in doubt, consult the city’s housing department or a landlord attorney.
• Budget for capital needs. If your building is older, price out seismic and life-safety upgrades now so you are ready if requirements tighten.
• Explore ADU options. On suitable lots, an ADU can add income or create a stand-alone unit to sell under the city’s condo path.
• Track comps and demand. Watch monthly rent data and nearby sales so you can pivot between hold, lease, or sell strategies in real time.

Ready for a local, step-by-step plan for your property? Let’s talk about timing, prep, and a strategy that fits Downtown San Jose’s next chapter. Connect with Elsa Garza for a market update or valuation, in English or en español.

FAQs

How will Google’s Downtown West affect home values near Diridon?

• Long term, more transit and amenities can support value, but near-term construction, parking changes, and new housing supply can influence pricing and timing by block and property type.

What should landlords in Downtown San Jose know about rent caps?

• Many units are covered by AB 1482’s statewide rent cap and just-cause rules, and San Jose has local protections; check if your unit is exempt before raising rent or issuing notices.

Will BART Phase II construction make access harder to my property?

• Expect periods of detours, staging, and lane closures along downtown corridors; plan showings, deliveries, and tenant move-ins around published construction windows.

Can I build an ADU and sell it separately in San Jose?

• Yes, the city implemented a path to sell ADUs as condo units under state law; confirm site eligibility, permitting steps, and title work before you start.

How does the Sharks’ new lease affect nearby businesses?

• The extended SAP Center agreement supports ongoing event activity and includes parking and operations planning, which can help stabilize foot traffic during nearby construction.