Complete Guide to Restaurant Buildouts in San Jose
San Jose is the largest city in the Bay Area and home to one of the most diverse restaurant scenes in Northern California, with everything from family-owned taquerias to upscale downtown dining. Restaurant buildouts in San Jose cost $150-$350+ per square foot in 2026, with total projects ranging from $300,000 to over $1 million depending on concept, space condition, and finish level. The city's permit process involves coordination between the Building Division, Santa Clara County Environmental Health, the Fire Marshal, and often the Alcoholic Beverage Control board. This guide covers San Jose's restaurant buildout landscape, the permit process, health department requirements, hood system standards, costs, timelines, and how to plan a buildout that opens on time.
What should I know about restaurant buildouts in San Jose?
Restaurant buildouts in San Jose cost $150-$350+/sqft in 2026, with total projects ranging from $300K to $1M+. The permit process involves the Building Division, Santa Clara County Environmental Health, the Fire Marshal, and potentially the ABC. San Jose processes permits faster than most Bay Area cities, typically 4-8 weeks for plan check. Hood and ventilation systems are the largest single cost at $50,000-$150,000+.
San Jose’s Restaurant Scene: A Growing Opportunity
San Jose is the tenth-largest city in the United States and the economic capital of Silicon Valley. With over one million residents and a metropolitan workforce that drives lunchtime and after-work dining, the city supports a thriving restaurant industry. From downtown San Jose’s SoFA district to Santana Row, Japantown, and the Vietnamese corridor along Story Road and Tully Road, the city offers diverse neighborhoods with distinct dining cultures.
For restaurant operators, San Jose offers several advantages over other Bay Area cities. Lease rates are lower than San Francisco and most Peninsula locations. The city’s building department processes permits efficiently. The customer base is large and diverse. And the availability of second-generation restaurant spaces, where previous tenants have already installed hood systems and kitchen infrastructure, creates opportunities to reduce buildout costs significantly.
This guide covers everything you need to know about planning, permitting, and building out a restaurant in San Jose.
Understanding San Jose’s Restaurant Market
Downtown San Jose and SoFA District
Downtown San Jose has undergone significant revitalization, with the South First Area (SoFA) district emerging as a culinary destination. Lease rates downtown run $3-$5+/sqft NNN, and spaces range from 1,000 sqft storefronts to 5,000+ sqft corner locations. Second-generation restaurant spaces are available periodically, and the city’s downtown development team is supportive of new restaurant concepts.
Santana Row and Valley Fair
These premium locations command the highest lease rates in San Jose ($5-$8+/sqft NNN) but offer built-in foot traffic and affluent demographics. Buildout costs tend to be higher because landlords and the development management company maintain strict design standards.
Japantown
San Jose’s Japantown is one of only three remaining Japantowns in the United States. Restaurant spaces here are smaller (800-2,000 sqft) and often come with existing kitchen infrastructure. The neighborhood attracts destination diners and supports specialty concepts.
Ethnic Food Corridors
Story Road, Tully Road, and South King Road feature dense clusters of Vietnamese, Chinese, and other Asian restaurants. Lease rates are lower ($2-$3.50/sqft NNN), and second-generation spaces are common. These corridors are ideal for operators looking to minimize buildout costs.
The San Jose Restaurant Permit Process
Building out a restaurant in San Jose requires coordination with multiple agencies. Understanding the process upfront prevents delays and keeps your opening timeline on track.
Step 1: Building Permit (Building Division)
The Building Division reviews your architectural and engineering plans for code compliance. This includes structural modifications, electrical systems, plumbing, mechanical (HVAC and exhaust), ADA accessibility, and occupancy classification.
- Submittal: Plans are submitted electronically or in person to the Planning, Building, and Code Enforcement Department
- Review timeline: 4-8 weeks for initial plan check
- Resubmittal: If corrections are required, allow 2-4 weeks for re-review
- Fees: Based on project valuation, typically $5,000-$20,000+ for a full restaurant buildout
Step 2: Health Department Review (Santa Clara County)
Santa Clara County Department of Environmental Health reviews your kitchen layout, food preparation areas, storage, handwashing stations, and waste disposal systems. This review ensures compliance with the California Retail Food Code.
Key health department requirements:
- Commercial three-compartment sink for dishwashing
- Separate handwashing sinks (minimum two, one in kitchen and one near restrooms)
- Grease interceptor or grease trap sized for your expected volume
- Commercial refrigeration with proper temperature monitoring
- Food-grade wall and floor finishes in kitchen and prep areas (FRP panels or equivalent)
- Adequate ventilation in kitchen and dining areas
- Pest control measures
Health permit fees: $700-$1,500 depending on restaurant size and type
Step 3: Fire Marshal Review
The Fire Marshal reviews fire safety elements including the hood and fire suppression system, fire sprinkler modifications, emergency egress, exit signage, fire alarm systems, and occupancy load calculations.
- Review timeline: 1-3 weeks, often concurrent with building plan check
- Key requirement: Type I exhaust hoods must have UL 300-compliant fire suppression systems with automatic fuel shutoff
- Inspection: The Fire Marshal conducts an inspection before the certificate of occupancy is issued
Step 4: ABC License (If Serving Alcohol)
The California Department of Alcoholic Beverage Control (ABC) issues licenses for establishments that serve beer, wine, or spirits. The ABC process is separate from city permits and runs on its own timeline.
- Type 41 (On-Sale Beer and Wine): For restaurants serving beer and wine with meals. Processing time: 45-60 days.
- Type 47 (On-Sale General): For full liquor service with a bona fide eating establishment. Processing time: 60-90+ days.
- Conditional Use Permit (CUP): Some San Jose locations require a CUP from the Planning Division for alcohol service, adding 2-4 months to the timeline.
Strategy: Begin the ABC application as soon as you sign your lease. The ABC process takes longer than the building permit and can delay your opening if started late.
Step 5: Final Inspections and Certificate of Occupancy
Before opening, you must pass inspections from the Building Division (structural, electrical, plumbing, mechanical), Fire Marshal, and Health Department. Once all inspections pass, the city issues a certificate of occupancy.
Hood System Requirements
The exhaust hood and ventilation system is the most critical (and often the most expensive) element of a restaurant buildout. San Jose follows the California Mechanical Code and NFPA 96 standards for commercial kitchen exhaust.
Type I vs. Type II Hoods
- Type I hoods are required over equipment that produces grease-laden vapors (fryers, grills, ranges, woks, charbroilers). They include a fire suppression system and must be designed by a licensed mechanical engineer.
- Type II hoods are used over equipment that produces heat, steam, or moisture but no grease (dishwashers, steam tables, ovens). They do not require fire suppression.
Hood System Components
A complete Type I hood system includes:
- Stainless steel hood canopy (wall-mounted or island-style)
- Grease filters and grease collection system
- Exhaust ductwork routed to the roof
- Exhaust fan on the roof
- Makeup air unit (to replace exhausted air and maintain neutral pressure)
- UL 300 fire suppression system with automatic fuel shutoff
- Controls and monitoring
Costs
| Component | Estimated Cost |
|---|---|
| Hood canopy and filters | $15,000-$40,000 |
| Exhaust ductwork and roof fan | $10,000-$30,000 |
| Makeup air unit | $10,000-$25,000 |
| Fire suppression system | $8,000-$15,000 |
| Installation labor | $10,000-$25,000 |
| Engineering and permits | $3,000-$8,000 |
| Total hood system | $56,000-$143,000 |
Taking over a space with an existing, compliant hood system can save $40,000-$100,000+ on your buildout. Verify the hood size, ductwork condition, and fire suppression certification before signing your lease.
Restaurant Buildout Costs in San Jose
Restaurant buildouts in San Jose cost $150 to $350+ per square foot in 2026.
All pricing is approximate, reflects 2026 Bay Area market conditions, and is subject to change. Every project is unique. Final costs are determined on a project-by-project basis during our design phase.
Cost by Restaurant Type
| Concept | Cost/Sqft | 2,000 Sqft Space |
|---|---|---|
| Fast-casual / counter service | $150-$250/sqft | $300,000-$500,000 |
| Full-service dining | $250-$350/sqft | $500,000-$700,000 |
| Fine dining / high-end concept | $300-$400+/sqft | $600,000-$800,000+ |
Second-Generation vs. Raw Shell
| Space Condition | Cost Impact |
|---|---|
| Second-gen with existing hood and kitchen | Save 25-40% on total buildout |
| Second-gen with hood only (no kitchen equipment) | Save 15-25% |
| Raw shell (no previous restaurant use) | Full buildout cost |
What Drives Cost
- Kitchen complexity: More cooking stations, larger hood systems, and walk-in coolers increase costs
- Bar construction: A full bar with draft system, glass washing, and under-counter refrigeration adds $30,000-$80,000
- Dining room finishes: Custom millwork, booth seating, accent walls, and lighting design add $30-$80/sqft to the dining area
- Restroom renovation: ADA-compliant restrooms cost $15,000-$30,000 each, and most restaurants need at least two
- Outdoor dining: Patio construction, barriers, lighting, and heating add $20,000-$60,000+
Timeline: Restaurant Buildout in San Jose
| Phase | Duration |
|---|---|
| Lease negotiation and site selection | 4-12 weeks |
| Concept development and space planning | 2-4 weeks |
| Architectural and engineering drawings | 4-8 weeks |
| Building permit plan check | 4-8 weeks |
| Health department and fire review | 2-4 weeks (concurrent) |
| ABC license application | Start immediately; 45-90+ days |
| Equipment procurement | 8-16 weeks (concurrent) |
| Construction | 10-20 weeks |
| Final inspections and certificate of occupancy | 1-3 weeks |
| Total | 6-12 months |
The critical path is typically the hood system fabrication and installation, followed by the health department final inspection. Starting the ABC application early and ordering long-lead equipment during the permit review phase keeps the timeline tight.
How Custom Home Handles Restaurant Buildouts
Custom Home Design and Build brings its design-build approach to commercial restaurant projects. Our team manages space planning, architectural design, engineering, permit coordination, construction, and equipment installation as a single coordinated effort.
For San Jose restaurant buildouts, we focus on:
- Designing efficient kitchen layouts that maximize output per square foot
- Coordinating with Santa Clara County Environmental Health early to avoid costly plan revisions
- Managing hood system design, fabrication, and installation
- Scheduling the buildout to align with ABC license processing and equipment delivery
- Delivering a turnkey space that is ready for staff training and soft opening
Start Planning Your San Jose Restaurant Buildout
San Jose’s growing dining scene, efficient permit process, and competitive lease rates make it one of the best cities in the Bay Area to open a restaurant. With the right planning and the right buildout partner, you can move from signed lease to grand opening on a predictable timeline and budget.
Contact Custom Home Design and Build to schedule a consultation and discuss your San Jose restaurant buildout.
Frequently Asked Questions
How much does a restaurant buildout cost in San Jose?
Restaurant buildouts in San Jose cost $150-$350+ per square foot in 2026. A 2,000 sqft fast-casual space costs $300,000-$600,000, a full-service restaurant runs $500,000-$800,000, and fine dining or high-end concepts can exceed $700,000-$1,000,000+. San Jose is generally 10-20% less expensive than San Francisco and Peninsula cities for comparable buildouts.
What permits do I need for a restaurant buildout in San Jose?
A San Jose restaurant buildout requires a building permit from the Building Division, a health permit from Santa Clara County Department of Environmental Health, a fire safety plan review from the Fire Marshal, a mechanical permit for hood and ventilation systems, and a certificate of occupancy. If you plan to serve alcohol, you also need an ABC (Alcoholic Beverage Control) license, which is a state-level process. Signage permits and a business license are also required.
How long does the San Jose restaurant permit process take?
Building permit plan review in San Jose typically takes 4-8 weeks. Health department review runs concurrently and takes 2-4 weeks. Fire Marshal review adds 1-3 weeks. Total pre-construction permitting takes 6-12 weeks when applications are submitted simultaneously. ABC license processing takes 45-90+ days and should be started as early as possible because it runs on a separate timeline from construction permits.
What are the hood system requirements for a San Jose restaurant?
Any restaurant with cooking equipment that produces grease-laden vapors requires a Type I exhaust hood with a fire suppression system. The hood must be designed by a licensed mechanical engineer and installed per the California Mechanical Code and NFPA 96 standards. The Fire Marshal reviews hood and suppression system plans. Hood systems typically cost $50,000-$150,000+ depending on size, including the hood, ductwork, makeup air unit, and fire suppression system.