The Future of Commercial Real Estate Los Gatos: What Smart Investors Are Doing Now
Thinking About Investing in Los Gatos Commercial Real Estate? You’re Not Alone.
If you’ve been living in Los Gatos for a while, you already know, this town is something special. With its walkable downtown, historic charm, and high-income community, it’s no surprise that commercial real estate here is one of the most talked-about investment topics right now.
But what about the future? Is the Los Gatos market still worth jumping into? What kinds of properties are getting attention? And is it better to hold, buy, or sell in 2025 and beyond?
As your local commercial real estate team, we’ve got boots on the ground and ears in every corner of this market. So, let’s dig into what we’re seeing and what smart investors should know.
Why Los Gatos Stays on the Investment Map
A Wealthy and Engaged Community
Los Gatos consistently ranks as one of the most affluent towns in Silicon Valley. The median household income is over $200,000, and that’s reflected in the kinds of businesses that thrive here; boutique shops, high-end restaurants, wellness centers, and professional services.
What does that mean for investors? Demand for high-quality commercial space stays strong, especially in well-located downtown areas. And because land is limited (we’re not exactly sprawling), properties tend to appreciate faster here than in larger, more saturated markets.
Where the Market is Headed: Four Key Investment Trends
1. Mixed-Use is Gaining Serious Momentum
Let’s face it: Los Gatos is small. There’s not a lot of empty land waiting to be developed, so the town has started warming up to mixed-use developments, think residential units above ground-floor retail or office space.
We’re seeing new projects being proposed downtown that offer housing above shops, especially near transit corridors. Investors love mixed-use because you’re tapping into two or more revenue streams from one building, and the blend of residential + retail can help stabilize cash flow over time.
Pro tip: Keep an eye on projects that offer public benefits, like affordable housing units or community spaces. These tend to win more support during the approval process.
2. NNN (Triple Net) Leases Are a Hot Ticket for Passive Income
If you’re the kind of investor who wants monthly cash flow without tenant calls at 10 PM, you should absolutely explore NNN lease properties.
In these deals, the tenant handles taxes, insurance, and maintenance, so you, the owner, can enjoy truly passive income. In Los Gatos, we’ve seen deals for everything from luxury auto dealerships to single-tenant retail buildings get snapped up fast.
3. Medical Office Space Is Quietly Booming
With an older average population and a growing demand for wellness, Los Gatos is ripe for medical office investment. Whether it’s primary care, dental, physical therapy, or even med-spa services, these tenants are looking for modern, well-located spaces.
Unlike traditional office tenants, medical professionals tend to sign longer leases and spend heavily on customizing their space. That makes turnover less likely and income more stable.
4. Adaptive Reuse is the Future of Redevelopment
Because Los Gatos is so protective of its character (and we love that), adaptive reuse is becoming a key strategy for growth. That means repurposing older or underused buildings, like converting a tired office building into a boutique hotel or turning an industrial warehouse into a wellness center.
This approach respects the town’s architectural charm while giving investors a chance to add value without starting from scratch. It also often wins favor with local boards and residents, making the approval process smoother.
What Smart Investors Should Be Thinking About
For First-Time Commercial Investors
- Start small, but think long-term. Consider retail condos, office suites, or small NNN deals.
- Do your homework on zoning and use restrictions. Los Gatos is careful with development—work with someone who knows the ropes.
- Understand your audience. Upscale tenants want top-tier finishes, convenient access, and strong visibility.
For Seasoned Investors
- Diversify your portfolio. Don’t overlook medical or mixed-use if you’ve only held retail or office.
- Explore 1031 exchanges to reposition assets into lower-maintenance properties.
- Look for value-add opportunities in properties with vacancy or under-market rents.
Why Timing Matters (and Why Now Isn’t Too Late)
We’re in a unique moment. Some investors are on the sidelines because of interest rates, but that’s exactly why others are finding deals.
Less competition = better terms, motivated sellers, and creative deal structures.
And Los Gatos? It’s still Los Gatos. The fundamentals; limited inventory, high demand, walkable charm aren’t changing. If you’re in it for the long haul, this is still a great time to invest.
Let’s Talk About Your Goals
At The Calvillo Group, we specialize in helping local investors and property owners build long-term wealth through smart commercial real estate decisions.
Whether you're curious about buying your first building, looking for a 1031 exchange solution, or ready to optimize your existing portfolio, we’re here to help.
