Author: Brian K. Miller
WALNUT CREEK, CA- The first residents of downtown Walnut Creek’s newest condominium residences are moving in. Called 555YVR, the $45-million, 87-unit project was entitled and financed in 2006 and broke ground in 2007. Then Lehman Brothers collapsed this time last year, triggering an economic and financial crisis that among many other things has significantly lowered property values.
Now, instead of the 30%-plus return on investment that condo developers had come to expect in the Heyday, 555YVR developer Thompson Dorfman Partners, its equity partner and its lender are hoping there will be an ROI, period. “Sales prices are approximately 20% off pro forma,” Bruce Dorfman tells GlobeSt.com. “Fortunately, our equity partner Mass Mutual and construction lender Bank of America have been cooperative-they are professional and experienced in this business.”
When the market began tanking last fall, TDP suspended their marketing and sales efforts, making do with a web site and a sign on the building that drove people to the web site. “We had no active marketing presence until we completed and building and had units people could tour,” Dorfman says. “It helped us; it preserved marketing dollars and alleviated the issue of having to keep buyers on board throughout the downturn.”
It ramped up marketing this past May and amid what Dorfman calls “incredible traffic” approximately 25% of the units have been tied up at prices ranging from the low $400s per square foot to the mid-$500s per square foot, with the average price right around $500 per square foot. It began closing on sales at the beginning of the month. Dorfman tells GlobeSt.com he fully expects all of the units in contract to close because the buyers have been qualified very recently, not prior to the downturn. “If they had committed two years ago it would be a concern,” he says. 555YVR is a four-story building with onebedroom and two-bedroom flats, as well as townhome units and live-work units with higher-end finished and floor-toceiling windowa. Most units have private decks or patios. Common amenities include a roof-top terrace with an outdoor fireplace and 360-degree views of the valley and Mt. Diablo, as well as free Wi-Fi, a private fitness center, media room, a dedicated dog run, and a 170-space subterranean parking garage.
Dorfman believes the project is seeing more than its fair share of buyers because of the uniqueness of the product in the Downtown Walnut Creek market, and its proximity to the BART station. The design, which includes a hip rooftop gathering place, is meant to be attractive to the young urban professional that wants to live in a modern, hip building in Downtown Walnut Creek and easily get to work in Downtown San Francisco.
The architects were KTGY Group and Kwan Henmi. One significant issue with the property was its location on busy Ygnacio Valley Road. Knowing people wouldn’t want to live at street level on that side, Dorfman says the arhcitects designed live-work units for that side of the building that have commercial space on the ground floor and the residential unit above.
“We’re getting the type of buyer we expected because it’s much different than anything else in the area,” Dorfman says. “Most of the other condo projects in Walnut Creek and in the I-680 corridor in general are more oriented toward empty nesters and seniors.”