When Costa Mesa, Calif.–based Warmington Homes acquired the Palo Alto property that was to become Vantage, an enclave of 76 contemporary townhomes, the builder anticipated that a majority of buyers (roughly 70 percent) would be Asian, and that many would be software engineers working for local tech companies. But the project team didn’t have the luxury of designing for this demographic from scratch. Located in a transitional section of Palo Alto, the infill parcel was already entitled upon purchase, meaning the pro forma was a done deal.
“The original developer had already plotted a majority of plan ones (not the best floor plan in the mix) to increase the unit count,” says Cheryl O’Connor, vice president of sales and marketing for Warmington’s Northern California division. “We knew that would be a challenge for us, so we intentionally under-priced [those units] and released more of them than the other plans at the beginning to load up sales.”
But strategic pricing wasn’t the only buoying factor that allowed this resilient project to overcome several obstacles—including cost overruns in direct construction and financing to the tune of $6 million, and project delays that put the release of phase one smack in the middle of the market downturn.
Entitled with a Build It Green component, Vantage had an immediate, well, advantage, in that it was destined from the start to become the largest solar community on the San Francisco Bay Area peninsula. This selling point resonated strongly with engineer buyers, given their innate curiosity about new technologies and how things work. Features such as photovoltaic panels, dual-flush toilets, low-VOC paints, automated lighting controls, and tankless hot water heaters were offered standard in every unit. Sales consultants with tech (not real estate) backgrounds were hired to help sell the homes with an emphasis on high performance. Media pitches touting the project’s green attributes (facilitated by a PR firm hired on retainer) led to positive press coverage in the San Francisco Chronicle and San Jose Mercury News, and on local TV and radio stations, thus countering the prevailing notion that it was not a good time to buy a home.
And then there was one other savvy move Warmington pulled off before the first models opened. Marsha Golangco, a feng shui consultant who works with several California builders, was brought in to walk the site and look at the plans, assess the project’s overall energy flow, and recommend minor modifications that could be performed cost effectively at a relatively late stage.
“Many of our communities are redevelopments, and that in and of itself is not necessarily positive feng shui,” says O’Connor, noting, for example, that by feng shui standards, cul-de-sacs are preferable to grids, insofar as curved lines are believed to produce positive energy flow, whereas straight lines are a negative. “In this case, we were next to a drainage canal and we knew that would be an issue. Marsha gave us some ideas on how to offset that feature with landscaping and planting materials,” she says.
Other recommendations from Golangco included additional lighting to alleviate dark corners, rounded handrails and bullnose countertops to soften otherwise hard-edged interiors, and—wherever feasible—revised kitchen layouts that prevented sinks and stoves from facing each other (fire and water don’t mix). “Sometimes there are smaller ways you can remedy a situation to achieve balance or make the environment more favorable,” says Golangco. “It’s not always a matter of scrapping the entire floor plan.”
So far, 51 units have been released at Vantage and 41 have sold. Some 85 percent of buyers have been Asian and half are computer engineers. Whereas most Bay Area communities are averaging 35 visitors per week, Vantage saw nearly 1,000 visitors in the first month after its model opening and is still averaging more than 100 visitors per week in spite of the housing slump.
“When we first bought the site, we did not anticipate a downturn and we expected four sales per month since everyone was selling at that rate two or three years ago,” O’Connor says. “Lately, we have been averaging a sales rate of 3.6 units per month, compared to the area average of 1.6 per month.”
Meanwhile, the marketing plan is evolving. “Vantage is our first green community, and we really did not do a great job [at first] in educating buyers on what to expect,” she says. “With 50 percent of our buyers being engineers, they are really focused on the technology. They actually measure how long it takes for the hot water to get to the shower head.” Warmington has begun offering seminars with suppliers from Bosch and Re-Grid (the solar manufacturer) to educate home buyers about how their green products work and is incorporating an interactive “green room” into one model. “We’ve found that just having a green brochure and talking about the green features is not enough,” says O’Connor. “Buyers need to experience the green first-hand.”
Learn more about markets featured in this article: San Francisco, CA, Los Angeles, CA.
