SAN JOSE – A Walgreens store site near downtown San Jose – one of the few pharmacies around – has been purchased by a Southern California real estate company.
The buyer is an affiliate controlled by Elliot Megdal & Associates, a Los Angeles-area real estate investment and development firm, documents filed March 4 with the Santa Clara County Recorder’s Office.
The subsidiary paid $6.2 million for the property, which consists of a Walgreens drug store at 780 E. Santa Clara St. in San Jose, according to county records.
Commercial records show that Beverly Hills-based Elliot Megdal & Associates is involved in real estate development and investment, with expertise in commercial properties.
The seller was a subsidiary controlled by the real estate department of Illinois-based Walgreens, according to public records.
The pharmacy building totals about 15,200 square feet, according to a real estate database. The overall property, including the adjacent parking lot, totals 1.24 acres, or 54,000 square feet. The vast majority of the property is undeveloped surface parking.
The property faces East Santa Clara Street and extends from South 16th Street to South 17th Street.
The newly purchased plot sits between the future sites of two BART stations, which are expected to be completed in about a decade, possibly later. One station would operate near the corner of North 28th Street and East Santa Clara Street and the other would be located at the intersection of First Street and Santa Clara Street.
The property’s $6.2 million purchase price this month is about 7% lower than the $6.7 million estimated value the county assessor’s office released to the mid-2021.
The Elliot Megdal & Associates subsidiary that now owns the 780 E. Santa Clara St. Walgreens parcel does not operate a readily visible website, so the nature of the company’s current real estate portfolio, as well as its real estate philosophy, does not are unclear.
However, Elliot Megdal & Associates has purchased small commercial properties in the Atwater Village neighborhood of Los Angeles and the town of Oxnard in Ventura County, according to press releases from real estate brokers. The Megdal firm said when buying Oxnard in 2016 that it intended to redevelop the property.
Downtown San Jose was rocked by the closure of a Walgreens store at South First Street and West Santa Clara Street in 2018 and the closure of a small Safeway store at 100 S. Second St. in 2019.
These two closings meant that Walgreens at East Santa Clara and North 17th streets had become the only major pharmacy in the area.
Whole Foods operates a bustling grocery store on the western edges of downtown San Jose at 777 The Alameda.
Walgreens also operates a pharmacy at 1399 W. San Carlos St. near Meridian Avenue in the city’s Midtown neighborhood.
It’s possible the 1.2-acre site could be redeveloped due to its location and size, said Bob Staedler, senior director of Silicon Valley Synergy, a land-use planning consultancy.
“The site is in an urban village, which makes it possible to build housing there,” Staedler said. “The Naglee Park neighborhood will miss having Walgreens nearby.”