SAN JOSE — A long-shuttered drugstore in San Jose where a housing development was once proposed has been bought by a Los Angeles real estate firm in a deal that hints at weaker property values for the site.
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The one-time CVS Health store was bought for $3.3 million, according to documents filed on July 9 with the Santa Clara County Recorder’s Office.
The retail site is located at 1097 Leigh Avenue in San Jose, the county property files show.
Orum Capital, a Los Angeles-based real estate firm that acted through an affiliate, bought the retail site from Longs Drug Stores of California. In 2008, CVS Health bought Longs in a $2.54 billion deal whereby all of the Longs retail sites were rebranded as CVS stores.
It wasn’t immediately clear what Orum Capital’s plans are for the empty store site. The retail building totals 29,800 square feet and was built in 1974.
This deal has occurred at a time when CVS is orchestrating plans to slash the number of stores that it operates in the United States.
CVS has revealed plans to shut 271 stores nationwide during 2025, according to the retailer’s annual report.
“During the third quarter of 2024, CVS finalized an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency, and reduce costs,” CVS stated in its annual report. “The company completed a strategic review of its retail business and determined that it plans to close 271 retail stores in 2025.”
The drugstore building is next to a dd’s Discounts store at 1792 Southwest Expressway in San Jose.
In 2022, SummerHill Apartment Communities proposed a 396-unit multifamily residential development and a senior care center at the site.
The housing would have replaced the dd’s Discounts store and the drugstore property with the housing and the senior center.
The apartment complex was never built, and SummerHill didn’t buy any of the parcels that were needed for the proposed development.
Orum Capital, the new owner of the drugstore property, is a real estate firm with expertise in owning and developing commercial properties. Orum Capital’s holdings are primarily in the Los Angeles area. The company doesn’t list any Bay Area sites in the stable of properties that it owns.
What is certain is the transaction points to weaker real estate values for the proeprty.
The $3.3 million purchase price was 47% below the property’s estimated value of $6.2 million, as calculated by the Santa Clara County Assessor’s Office.
Slumping property values can imperil tax revenue for an array of public agencies, including cities, counties, regional agencies, and school districts.
The 1097 Leigh property isn’t the only CVS store site that has been bought in recent years. In 2023, a South Bay real estate investor paid $10.5 million for a CVS building at 1685 Tully Road in San Jose.
