Warmington Homes builds against the tide in downtown San Jose - Silicon Valley / San Jose Business Journal:

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The Costa Mesa company believes the product single familyhouses — and its location near Japantowb is a good bet. Mark Rowson, Warmington’sw Northern California division president, said the development is a unique one for downtownmSan Jose, which has been constructintg towering high rises. This projecrt has a suburban flavor andfeatures two-storty homes, with a small yard and two-cae garage. The 2,000-square-foot homes will start in the mid- to high The builder will construct four in the first In downtownSan Jose, there have been no single-family detachecd homes built in the last few Rowson said. Warmington purchased the 10-acre industriall site in December 2008.
Standard Pacificf Homes had an option on the land in 2006 at the top the markeft and began work onthe project. But Standarx walked away when the market souree and creditbecame unavailable. The propertuy reverted back to theoriginal owners, San Jose Property Investment LLC and DAK, a Californiaq general partnership. Warmington bought the land from San Jose Propertyy Investmentand DAK. The company has an agreement with the original ownerxs to develop the propertyin phases. “Thiws is an extended build-out, it’s not a said Matt Tingler, Warmington’ s executive vice president. “We’re very sensitivde to oversupply.
” Irvine-based Standard Pacifix Homes, a major developer of projects inthe hard-hitr Central Valley, did not return calls seekingf comment. Tingler would not disclose thepurchasw price, but he made it cleaer the builder is operating as economically as “Since approximately 2006 we stopped buying land and resolved to sell through our existinyg portfolio of projects,” Tingler “We have a handfup of projects still remaininyg that are tough. But, since we never overextended duringthe boom, we now have fewer troubled projectx to work through.
” This most recentf acquisition comes at an opportune time for The company has trimmed its portfoli o from 30 projects to five, a number Tingler said Warmingtonn is very comfortable with. Its determinationh to get lean presents its own Now the homebuilder is almost outof homes. “Wed sold out of Viridiab in San Jose and Vantag inPalo Alto,” Tingler said. “. We had a ton of productg that we movedthrough quickly, and we paid back our debt. Now we’rr out of product.
” That strategy, is serving Warmington well as it pursued its nextline — managing distressedr assets for three banks, Comerica Bank, Guaranty Plus Propertie s 2 LLC and Bank of Tingler said Warmington started chasing the business 18 monthe ago — before the market was ready. Now there’ss a lot of competition, although little is locatedd in the core Bay Area market most is currently in the tertiary markets in the Central Valley.
Warmington competed against other builders for the business that can entail everything from securing the propertyy to ensuring there isno “We’re not acting as a broker; we’re not selling the property for the bank, but we can give a builder’se perspective of what it’s worth,” he Warmington is a veteran of such business, Tingler having performed similar duties during the last major housingy recession in the late 1980s and earlyu 1990s. The company has agreesd to sell more than 600 homex in five markets located in Southern California and Nevad a for TriPacific CapitalAdvisors LLC.
Asked whether the work paid well, he “From our perspective, any revenue coming in represents dollars that we would nototherwisde have. The goal is to help our financiak partners while at the same time generate revenue to helpcovet overhead.” It also keeps Warmington abreast of what’s going on in many markets. Rowsonj said the South Bay has the greatest opportunitytfor upside. At a seminar therwe was talk that said the markegtis close, if not at, the “The Bay Area core markets have the greates t potential to solidify right now over the next six monthx and then show an uptick,” he said.