Lafferty Swings For ‘Home Run’ In San Ramon

March 6, 2013 8:00 am

By Blanca Torres, San Francisco Business Times

After years of grappling with a severe real estate decline, housing developer Lafferty Communities is back to building and now tackling the 440-acre Faria Reserve site in San Ramon — a property that managed to evade development for decades. The project represents not only another shot for the site, but for the developer as well.

San Ramon-based Lafferty Communities bought the property last year along with approval for a master development of about 750 units on rolling hills and green pastures — a plan one housing expert called a “home run” if it materializes.

Housing sales are on fire in the Tri-Valley with prices rebounding, but Lafferty Communities faces the challenge of making sure various regional authorities give its final development plan the OK.
Rick Lafferty
“We saw that we could revise the land plan and reach a compromise with the resource agencies,” said Rick Lafferty, the development firm’s founder and CEO. “Other prospective buyers wanted to do it their way. We have a different philosophy.”

The developer altered previous plans to preserve more of the land’s natural features such as creeks. About 289 acres of the site will be developed and the rest will remain open space for grazing.

Lafferty Communities’ proposal includes 302 apartments with 89 set aside for seniors and about 450 single-family homes ranging from attached townhouse styles to large detached homes. Lafferty projects that prices will start near $500,000 and top $1 million.

The property sits in the northwest quarter of San Ramon less than a mile from Interstate 680 and is the last large greenfield development site in the city.

In the past few decades, other significant master-planned communities such as Windemere and Gale Ranch brought thousands of new homes and residents to the city, but other than the Faria Reserve, available land for housing is tapped out.

“(Faria) is a home run in the making,” said Dean Wehrli, who covers Northern California markets for John Burns Real Estate Consulting. “That market desperately needs new home inventory.”

San Ramon is known for offering residents a suburban wish list of features: top-rated schools, parks, retail and access to transportation such as freeways and commuter trains.

Wehrli said the Tri-Valley is increasingly popular with Silicon Valley workers who would pay significantly more for a similar home and set-up in the South Bay.

Various homebuilders are pushing new developments as fast as they can build them, Wehrli said, for buyers spurred by low mortgage rates and the economic recovery.

But perhaps the biggest factor fueling Lafferty Communities and other homebuilders alike is the lack of existing inventory on the market.

“It just takes away your competition,” Wehrli said. “Development activity came to a near standstill at the worst of the recession, so developers are playing catch up in getting product to the market.”

Lafferty Communities will likely break ground on the first homes in Faria in 2016 if the developer can secure approvals this year and then take another two years to prepare the land for homes.

Meanwhile, the firm is busy with other projects in Livermore, where Lafferty Communities expects to start construction on 58- and 67-unit projects this year, and Manteca, where the builder has 443 homes under construction. It is also buying a 2,400-unit site in Solano County. “We develop lots for our own platform, but we can sell lots to other developers,” Lafferty said. “It gives us a lot of latitude.”

The firm’s current activity represents a major turnaround from where they were just a few years ago. Lafferty Communities downsized from about 100 employees pre-recession to eight, and now is up to 18.

“The survivors in the housing industry have endured the most acute real estate correction in history,” Lafferty said. “The market is very supply-constrained right now. The resale market is virtually zero. That gives homebuilders an opportunity.”

See the original article at the San Francisco Business Times.