SAN JOSE — Hobby Lobby has sealed a deal to lease a big chunk of store space in San Jose, a rental agreement that hints at some green shoots of economic hope in a forbidding landscape for Bay Area retail.
The arts and crafts retailer has successfully capped off a wide-ranging hunt for a new location by leasing space within Almaden Plaza, a high-profile shop and restaurant complex in South San Jose.
Hobby Lobby has leased 62,000 square feet of “improved retail space” within Almaden Plaza, which is located at 5353 Almaden Expressway, documents on file with the Santa Clara County Recorder’s Office show.
The retailer is taking over the second-floor space that had been occupied by Bed Bath & Beyond, a big-box merchant that filed for bankruptcy this year and closed the San Jose location, along with other brick-and-mortar sites.
“The director of real estate for Hobby Lobby toured the space and he is tremendously excited about this location,” said Jim Fletcher, a commercial property broker who arranged the lease.
The retailer’s closest other store is a relatively small site in a former Mervyn’s store in Morgan Hill.
“Hobby Lobby had been looking at a whole lot of locations in South San Jose before they chose this one,” Fletcher said.
The former Bed Bath & Beyond space totals 78,000 square feet and Hobby Lobby will be able to expand beyond the 62,000 square feet it leased, according to Fletcher.
Hobby Lobby’s future site is next to a Barnes & Noble bookstore and a former Buy Buy Baby ground-floor site. Fletcher hopes to soon be able to start marketing the Buy Buy Baby site to prospective tenants.
The deal is a reminder of how quickly the retail real estate landscape can shift.
“You had some retailers going out and another retailer coming in,” said David Taxin, partner with Meacham Oppenheimer, a commercial real estate firm. “That’s how it works sometimes.”
Oklahoma-based Hobby Lobby signed a 10-year lease, the county documents show. The starting date of the lease wasn’t included in the public records. Hobby Lobby also obtained the right to renew its lease twice through five-year extensions, the real estate documents show.
Hobby Lobby’s roots go back to 1970 when the retailer’s founders, David and Barbara Green, began making miniature picture frames out of their home.
In 1972, the Greens opened their first store, a 300-square-foot retail site in Oklahoma City, according to a post on the Hobby Lobby website.
Now, “with more than 900 stores, Hobby Lobby is the largest privately owned arts-and-crafts retailer in the world with over 43,000 employees operating in 48 states,” the retailer states on its website.
The company has also sparked significant controversy. Hobby Lobby made headlines in 2014 when the U.S. Supreme Court ruled it didn’t have to provide health insurance covering certain contraceptives the conservative Christian owners objected to on religious grounds.
The county documents didn’t disclose when Hobby Lobby intends to open its new San Jose store. Fletcher estimated the retailer could be open by sometime in the fall of 2024, ahead of next year’s Christmas shopping season.
“This is a great location for Hobby Lobby,” Taxin said. “The population density is very high. Within 10 miles of the site, you have 1.5 million residents. Within five miles you have about 650,000 people. That shopping center has extremely high traffic.”
Besides Barnes & Noble, Almaden Plaza’s other prominent merchants include Costco, PetSmart, Trader Joe’s, Ross Dress for Less, T.J. Maxx and HomeGoods.
Almaden Plaza has agreed to provide time for Hobby Lobby’s logo on the shopping center’s large and highly visible electronic sign.
“Hobby Lobby is going to hit a home run with this location,” Fletcher said. “They will do phenomenal business.”