Trumark Homes has started construction on an 8-acre development in Milpitas, Calif., that, when completed, will include 134 single- and multifamily homes.
This site is the fourth in California’s Silicon Valley that Trumark has acquired in the past 12 months, and the sixth it is developing in partnership with the land and housing division of Resmark Cos., the Los Angeles-based private equity firm focused on real estate.
Trumark expects to deliver hundreds of new homes in northern California over the next year. It also has 3,600 lots under its control from Sacramento to the Silicon Valley, 2,000 of which are in the San Francisco Bay Area, and 70% of these entitled for multifamily, says Mike Maples, principal and co-founder of the home builder’s parent Trumark Cos.
Maples says Trumark is “agnostic” when it comes to building one product type over another, be it single- or multifamily. “We’re more interested in land-specific solutions.” It is on schedule to start four communities in Silicon Valley in 2014, on top of seven infill projects in San Francisco it has in the works through Trumark Urban, a division it launched last January. Maples says those infill projects will produce 600 condo units in downtown San Francisco that would range from 500 to 1,500 square feet and be priced from $1,000 to $1,400 per square foot. The first project, with 26 condos, got started this month.
Trumark is committed to invest more than $300 million in Trumark Urban, which builds in a San Francisco Bay Area that, says Maples, “is so undersupplied it’s hard to fathom.” Indeed, a report that Polaris Group released in November forecasted an average of less than 200 new condo units per year coming online in that market from 2012 to 2015.
Meanwhile, in Milpitas, Trumark is building under its PACE brand, as in “accelerates life to the fullest,” explains Mark Higgins, Trumark’s sales and marketing vice president. The brand’s products target single professionals, young couples, and growing families that are seeking relief from the area’s high rents. The builder has already begun site work (which included tearing down two commercial buildings), and will start building models that are scheduled to open next January.
There will be two communities in this PACE project: one called Velocity, which will include 91 single-family attached three-story townhouses that range in size from 1,200 to 1,947 square feet and are priced from the $500s to the high $600s; and the other called Momentum, featuring 43 single-family three-story detached homes whose sizes will run from 2,225 to 2,489 square feet, with price tags from the high $700s to the low $800s.
Preselling is expected to begin later this year. And building is expected to continue through the second quarter of 2015.
The communities, which will share amenities to encourage interaction among their residents, are transit-oriented in that they will be a 10-minute walk from a future BART subway station and connected to a citywide trail system.
Since May 2009, Trumark has raised in excess of $140 million in equity that has funded 15 deals. And since 2010, Trumark has generated $153 million from the sale of land to other builders, says Maples. It’s clear the company is working toward becoming a major force in California’s real estate and home building sectors, although unlike some of its competitors, Trumark has no immediate plans to raise capital through a public offering. “You have to wonder whether that window is opening or closing,” observes Maples about the recent spate of builders selling to the public and investors.
While most of its activity currently is in northern California, Trumark Homes continues to eye the southern half of the state for growth opportunities. “It’s definitely getting better, if not as strong as the Bay Area,” says Maples about southern California. Later this year, Trumark will start a project in Los Angeles’ diverse commercial/residential Silver Lake neighborhood near Hollywood that will include 70 three-story detached houses “that will be like old row homes,” says Maples.
John Caulfield is senior editor for BUILDER.