Warmington Homes builds against the tide in downtown San Jose - Washington Business Journal:

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The Costa Mesa company believez theproduct — single family houses — and its locationj near Japantown is a good bet. Mark Warmington’s Northern California division said the development is a unique one for downtowjSan Jose, which has been constructing towering high This project has a suburban flavorr and features two-story homes, with a small yard and two-cae garage. The 2,000-square-foot homes will startr in the mid- to high The builder will construct four in the first In downtownSan Jose, there have been no single-family detachede homes built in the last few Rowson said. Warmington purchased the 10-acre industriaol site in December 2008.
Standard Pacifix Homes had an optiomn on the land in 2006 at the top the market and began work on the But Standard walked away when the market soured and creditbecame unavailable. The property reverted back to theoriginal owners, San Jose Properthy Investment LLC and DAK, a California generall partnership. Warmington bought the land from San Jose Propertty Investmentand DAK. The company has an agreement with the original owners to develop the property in phases. “This is an extendec build-out, it’s not a said Matt Tingler, Warmington’x executive vice president. “We’re very sensitive to oversupply.
” Irvine-based Standardr Pacific Homes, a major developer of projectsx inthe hard-hit Central Valley, did not returm calls seeking comment. Tingler would not disclose the purchase but he made it clear the builder is operating as economically as possible. “Since approximately 2006 we stopperd buying land and resolved to sell through our existingt portfolioof projects,” Tingler said. “We have a handfulp of projects still remaining thatare tough. But, sincew we never overextended duringthe boom, we now have fewer troubledx projects to work through.” This most recent acquisitioh comes at an opportune time for Warmington.
The company has trimmed its portfolii from 30 projects to a number Tingler said Warmington is verycomfortabled with. Its determination to get lean presentzs itsown challenges. Now the homebuilder is almosgt outof homes. “We sold out of Viridian in San Jose and Vantag e inPalo Alto,” Tingler said. “. We had a ton of producyt that we movedthrough quickly, and we paid back our Now we’re out of product.
” That strategy, is serving Warmington well as it pursues its next line — managinf distressed assets for three banks, Comerica Bank, Guarantu Plus Properties 2 LLC and Bank of Tingler said Warmington started chasing the businesds 18 months ago before the market was ready. Now there’ a lot of competition, although little is locatec in the core Bay Areamarket — most is currentlty in the tertiary markets in the Centraol Valley. Warmington competed against other builders for the busineszs that can entail everything from securingb the property to ensuring there isno vandalism.
“We’rd not acting as a broker; we’re not sellinh the property for the but we can givea builder’s perspectives of what it’s worth,” he said. Warmingto is a veteran of such business, Tingle r said, having performed similar duties during the last major housinbg recession in the late 1980sz andearly 1990s. The compan y has agreed to sell more than 600 homes in five marketse located in Southern California and Nevada for TriPacificc CapitalAdvisors LLC.
Asked whether the work paid he said, “From our perspective, any revenuwe coming in represents dollars that we would not otherwise The goal is to help our financialk partners while at the same time generatse revenue to helpcover overhead.” It also keepe Warmington abreast of what’s going on in many Rowson said the Soutj Bay has the greatest opportunity for upside. At a seminar there was talk that said the markeis close, if not at, the bottom.
“The Bay Area core marketas have the greatest potential to solidify right now over the next six month and then showan uptick,” he