CUPERTINO — An odyssey to transform an old South Bay shopping center into a lively new neighborhood of homes, shops, restaurants, and offices is about to reach a key stage, with the project’s first buildings set to sprout in 2026.

The Rise, a mixed-use Cupertino village proposed at the site of the mostly demolished Vallco Shopping Mall, is slated to begin emerging from the ground next year, according to Sand Hill Property Co., the developer and principal owner of the project site.

“This is going to be the heart of the project,” Reed Moulds, project executive for The Rise, said in an interview with this news organization. “We are now talking about vertical construction, and we are starting with Town Square West.”

One key shift: The project, when complete, will have fewer affordable homes compared with earlier iterations of the development, according to Moulds, a managing director with Sand Hill Property. The Rise will also have less office space.

Residents will be able to occupy the project’s first homes starting in 2028, according to a new update for the development that Sand Hill Property has submitted to Cupertino city officials.

“In mid- to late 2026, we expect to see the project coming out of the ground,” Moulds said. “There will be real buildings. There will be keys for people to move into their homes.”

Both the latest version and the prior version of The Rise envisioned a neighborhood with 2,669 housing units once all phases were complete.

In the current iteration, 356 affordable housing units are being planned, compared with a prior proposal for 890 affordable homes, according to Sand Hill Property.

This means more market-rate rental and for-sale homes will be in the mix of residences at The Rise, which is being developed on a 52-acre site near the interchange of Interstate 280 and North Wolfe Road in Cupertino.

Sand Hill Property emphasized it is keeping affordable homes very much in mind as the real estate firm prepares to launch vertical construction.

“The first thing we are going to build is affordable housing,” Moulds said. “We are demonstrating our commitment to affordable homes.”

The Town Square West component of the project will deliver 1,369 housing units, including 232 affordable apartments, 744 market-rate rental units, and 393 for-sale homes, along with more than 200,000 square feet of retail. The 232 affordable units will be part of the very outset of the vertical construction. Town Square West will rise on 20 of the project’s overall 52 acres.

“Construction financing must still be completed,” Moulds said. “That will be undertaken in the next few months. The modifications are necessary to align the first phase of the project with what we think is financeable in this market.”

Lenders are more inclined to finance construction of market-rate apartments with larger units than affordable units, according to some real estate experts. Below-market-rate apartments are less attractive to lenders.

A more viable path to financing will also bolster Sand Hill Property’s commitment to provide the city with $5 million in community benefits, one of the numerous components of the project that emerged from years of review, public meetings, discussion, and decisions regarding the vast project.

“We appreciate the city’s partnership and the community’s engagement throughout this process,” Moulds said.

Sand Hill Property plans to build less office space at The Rise compared with earlier versions of the project.

The Rise’s latest version envisions about 1.5 million square feet of offices. Prior versions projected 2 million square feet.

“We do anticipate developing offices here at some point,” Moulds said.

Market conditions are inhospitable for the development of new Bay Area offices without tenants identified prior to construction, real estate reports and experts state. Office vacancies remain elevated. Rents are still soft.

The Rise’s first phase will feature 202,000 square feet of retail and restaurant spaces. Another 18,000 square feet of retail space will be added in later stages of the project.

The project will feature 14 acres of open space, including plazas, playfields, and a long bike path.

“We hope this town square will be the heart of the community, a downtown for Cupertino,” Moulds said. “It will be a mixed-use vibrant environment that we have been aspiring to build on this site for many years.”

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