Former downtown San Jose Safeway site goes up for sale in tricky market

SAN JOSE — A long-shuttered Safeway supermarket site in downtown San Jose is up for sale through an auction, according to a marketing brochure circulated by real estate firm Prudentia.

The space at 100 South being offered for sale is on the ground floor of a 197-unit residential tower and is near San Jose State University.

“There is a built-in customer base for robust daily foot traffic,” the brochure states.

The commercial space totals 24,100 square feet.

“Large retail vacancies are a challenge in every city in America,” said Mark Ritchie, president of San Jose-based real estate firm Ritchie Commercial.

Ritchie said a buyer might seek to place several uses into the space.

“Maybe the best idea would be to physically divide that into considerably smaller square footages,” Ritchie said. “That might be a solution.”

A subdivision of the space could make it possible for multiple restaurants or shops to operate in the ground-floor space, which is at the corner of South Second Street and East San Fernando Street.

“This is on a great corner,” said Erik Hayden, an executive with Urban Catalyst, a real estate firm whose affiliate owns a parking garage next to the commercial space that’s up for sale.

In 2019, Safeway closed at the location, ending a brief stint there. The shutdown left that part of downtown San Jose without a supermarket.

The space has now been empty for more than six years.

“You could see a beauty school, or trade school, or some sort of government agency go into that space as a tenant or an owner,” Ritchie said. “This would be the case if some group wanted to take the entire space.”

Hayden believes that shops and dining establishments would fare well, if the spaces were split up.

“Retail and restaurant tenants are very interested in this space,” Hayden said. “A lot of restaurants or stores would be happy in that space.”