@First Development Brings Big Change

Hunter/Storm LLC has helped create a ‘there’s there’ for Silicon Valley by placing amenities in close proximity to people’s homes and workplaces. The company is responsible for developing numerous large retail centers, office buildings and industrial sites throughout the valley.

Its most notable San Jose project, however, is the new @First mixed-use development, home of the 560,000-square-foot headquarters of networking company Brocade Communications Systems Inc., two hotels, a 145,000-square-foot Target store and neighboring 80,000-square-foot retail village with such tenants as CVS/pharmacy, Fresh & Easy Neighborhood Market, Panera Bread, Chipotle Mexican Grill and Panda Express.

The project was one of the valley’s largest and most sought-after development deals and land sales in 2008 when Brocade agreed to spend more than $225 million to build a 562,000-square-foot headquarters purchased from Hunter/Storm. Brocade also retained Hunter/Storm as its development manager. That sale, launched Hunter/Storm’s larger plans for the adjacent
39acre site – a gateway to San Jose’s North First Street neighborhood.

Three years later, the project is already making a big impact in the city.

“This project has moved forward the city’s vision for North San Jose,” Nanci Klein, deputy director in the Office of Economic Development for the city of San Jose. “They worked very closely with the city. They understand our issues. They have built a project with horizontal density that also creates a ‘there’s there’ for the Capital of Silicon Valley.”

Klein has nothing but praise for Derek Hunter, president of Cupertino-based Hunter Properties, Inc., the umbrella company, and managing member of Hunter/Storm LLC, and Ed Storm, chairman of the board of Hunter Properties.

“They are as adept at building business relationships as they are with developing office buildings and shopping centers. Hunter understands land and what the financial community is looking for. (They) just have a tremendous handle on the soup to nuts of development and a great sense of their legacy in the industry,” Klein said.

James Chung, partner in the San Jose office of Terranomics Retail Services, has been leasing retail space in the @First development. He said Hunter/Storm has a great diversity of development experience.

“(Hunter/Storm) has done it all,” Chung said. “The @First project is a great one, but this is just the tip of the iceberg for them.”

Derek Hunter has a long history in the valley. His real estate development and investment company is an outgrowth of one started by his father, Derk Hunter in 1960, called Demmon-Hunter.

Hunter joined forces with Ed Storm, whom he described as a “friendly rival” and former neighbor in 1986.

“We knew each other and had lots of respect for each other’s projects,” Hunter said. Over its history, the company has developed more than 4.5 million square feet of commercial space. The company has branched out from an early focus on office and research and development space into retail development and self-storage facilities.

Hunter/Storm has been involved in some of the region’s most high-profile developments, including the McCarthy Ranch shopping center in Milpitas, Silicon Valley’s first power center, which opened in 1992.

The company also developed the Old Town retail center in downtown Los Gatos; Campbell’s Hamilton Plaza, anchored by an expanding Whole Foods Market store; and Powell Street Plaza, an Emeryville power center anchored by Ross, Trader Joe’s, Petco and Pier 1 Imports.

In the 21st century, the company has increasingly moved into transit-oriented development and mixed-used projects favored by officials of densely developed Bay Area cities.

Finished projects include University Station in Santa Clara, a 223,000-square-foot office/R&D development adjacent to Santa Clara University, and Civic Park Cupertino, a development with office, retail and residential components next door to a public park and a city library.

Hunter said he’s looking forward to his next major transit-friendly, mixed-use development adjacent to Mineta San Jose International Airport.

Coleman Landings, which could accommodate up to 1.5 million square feet of office space, residential units and a new stadium for the San Jose Earthquakes soccer team, is going through its entitlement phase.

Hunter credits the company’s growing diversity for its ability to endure tough economic times that have hit the development and construction field hard.

“We are fortunate to have access to capital, dynamic tenants and be located in the extraordinary Bay Area market,” said Hunter, who has spent three decades as a commercial developer. “We have had challenges during the recession and the dotcom bust before it. But with our company’s solid track record and long-term perspective, we have been able to manage those cycles.”

Principals: Derek Hunter, Jr./Edward D. Storm
Specialty: Retail centers, office buildings, industrial developments
Notable projects: @First mixed-use
development, McCarthy Ranch shopping center,
University Station in Santa Clara, Civic Park Cupertino