Within the next 45 days, Irvine, Calif.-based Trumark Homes plans to begin selling townhouses at Capitol Station, a 45-unit community in San Jose, Calif., that Trumark took over recently from U.S. Bank, the third such bank-owned property this builder has acquired.
Eleven of the homes in this community—once known as Grandview Terrace—were completed and sold in the summer of 2008 by its previous developer, Pinn Brothers Construction. All of the exteriors of the other units are completed “and there’s no mold or water issues,” says Michael Maples, a principal and CEO at Trumark Homes. However, while some units simply need to be cleaned up, others need more extensive construction before they are in sellable shape.
The townhouses range from 1,316 square feet to 1,809 square feet, and will be priced between the high $300s and the mid $400s. Maples says his company became interested in this project after the bank cleared some of its lien problems and put it back onto the market. “It was a quick opportunity for us to enter Silicon Valley,” where Trumark’s sister company, Trumark Commercial, is already active, and where Maples says there continues to be strong job creation, which in turn is placing price pressure on rental apartments.
While finding buyers who can qualify for mortgages remains a challenge for builders around the country, “Silicon Valley is a different ball game,” says Maples. “People here have great credit scores, can make big down payments, and we expect to have quite a few international buyers.”
With Capitol Station, Trumark is following its pattern of developing communities where there’s a scarcity of product. Currently there are only seven new townhome projects in the works in Silicon Valley.
Since May 2009, Trumark Homes has raised more than $95 million in equity and has closed nine deals for communities. (Maples says his company tapped a private construction lender specifically for financing to acquire Capitol Station.) The builder controls more than 1,960 lots in urban areas in California, which the company estimates will eventually translate into more than $900 million in future revenue. More than 1,390 of those lots are in its pipeline in Northern California.
In late summer, the builder plans to open models at Centerplace on Capitol, a community in San Jose where it intends to build 94 homes. Trumark has received approval from the City of Milpitas, Calif., for a 9.2-acre, 134-unit townhouse community it calls Contour, which is a 10-minute walk from the future Milpitas BART station. This community’s first model should be open by early 2013. (Trumark has stated that it might team up with another builder for the Contour project.) Trumark also plans to build a transit-oriented community in Santa Clara, Calif., that will include 96 townhouses, 56 single-family detached homes, and 450 apartments.
Maples says that when it comes to rental, Trumark is “site-specific oriented.” He recognizes that there’s a growing market, especially among younger buyers, for high-quality and amenity-rich apartments that are within walking distance of mass transit. And Trumark is flexible enough to build rental units when a city might require a higher-density community. The company, in fact, expects a good portion of its future growth to come from transit-oriented developments around San Francisco and in Southern California.
John Caulfield is senior editor for Builder magazine.