Nearly 1,200 new Bay Area units under way
Publication: Business Journal
Date: May 6, 2013
MILL VALLEY — Thompson Dorfman Partners, LLC, said it plans to spend $500 million in the next three years building multifamily and mixed-use developments in Northern California and hired a veteran of such projects to oversee the expansion.
The 14-year-old company hired Gillian Sutton Cho as vice president of development to manage acquisition and entitlement of projects, including almost 1,200 Bay Area units in design, entitlement or construction.
“The Bay Area apartment and housing market, as a whole, is undersupplied, and the evidence of that is in the rapid rise in home prices and apartment rents,” said co-founder Bruce Dorfman.
Different from the past few economic cycles, the Bay Area has been leading the nation out of recession, and that recovery is exacerbating the slow pace of housing development, he said.
All the Northern California development sites have been identified and are in various stages of design, entitlement, permitting and construction, according to Mr. Dorfman.
One of the new projects Ms. Cho is overseeing is a 100,000-square-foot, 81-unit apartment and retail development in the Lower Pacific Heights neighborhood of San Francisco. Other projects include 271 units in San Jose, two Foster City projects and a revived mixed-use project in Emeryville. The San Jose project is under construction now and will have units available next year. Completion of the other developments will follow through 2018.
“Capital has returned to Bay Area multifamily development in a pretty significant way,” Mr. Dorfman said. “But there’s not a lot of opportunities for them. There are few institutional-quality site in the market.”
Will Thompson and Mr. Dorfman (415-381-3001, thompsondorfman.com) started the company in 1999 and specialize in urban infill projects in Northern and Southern California. They have built and managed more than 10,000 units in 35 multifamily and mixed-use communities.
Two recent ones in the North Bay were The Overlook at Fountaingrove and The Boulders at Fountaingrove, 124- and 78-unit complexes finished in that upscale northeast Santa Rosa community in 2003 and 2005, respectively.
Though the North Bay is the developer’s home, it’s not as attractive for the desired type of projects, according to Mr. Dorfman. First, high-density, urban-infill, transit-oriented projects are the company’s forte, but building such projects along the Highway 101 corridor in North Bay has been challenging because of slow-growth politics, he noted. Second, expansion of employment in Marin and Sonoma counties has been slower than elsewhere, he said.
Despite having one of the fastest annual job growth rates in the nation, Sonoma County still remains more than 20,000 jobs below peak employment in 2006, according to state figures.
Yet Thompson Dorfman continues to look at development opportunities in areas being zoned for transit-oriented development at stations along the Sonoma-Marin Area Rail Transit commuter route set to link both counties starting in 2016. But based on the company’s experience elsewhere in the Bay Area, projects around SMART stations will be a “longer play,” according to Mr. Dorfman.
“We’ve developed at the Walnut Creek BART station and several Caltrain stations on the Peninsula, but the infrastructure was already there,” Mr. Dorfman said. “There were very large job centers on the rail line at stops, and people developed a habit of using BART or Caltrain. All the necessary characteristics were in place. It was not overnight.”
Before coming to Thompson Dorfman, Ms. Cho was vice president of development at Extell Development Co. in New York City. She managed large-scale mixed-use development projects in Manhattan, including 5 million-square-foot, 3,000-unit Riverside South. The completion of five residential buildings with the combined gross sellout value of more than $2 billion and the rezoning of Riverside Center, an 8.2-acre master plan, and the final site in the Riverside South neighborhood.
Prior to Extell, Ms. Cho was a management consultant in Bain & Company’s London and New York offices. She advised hotels, financial services, private equity, health care and consumer products clients in the U.S., U.K. and continental Europe.