KB Home Purchases Milpitas Industrial Location for $43.9MM

KB Home Milpitas iStart Financial Dixon Landing Business Park Danville Trumark Homes Lennar Bay Area Livermore SoMa Polaris Pacific San Francisco

One of the nation’s largest homebuilders, KB Home, closed on a deal in Milpitas just days before the end of the year buying 1210 California Circle for $43.9 million, according to public documents. The deal, which closed on December 29th, is interesting in the sense that an existing industrial building is on the location today, an indication of where the market and the builders see greater financial upside these days in Milpitas.

[contextly_sidebar id=”RPlWKPgHtJ0EXwf971XjKjqHDeq45WLg”]The seller of the 120,000 square foot industrial property build in 1988 was an entity associated with iStart Financial. The former owner had already gone through the process of gaining approval to build 149 three-story attached residences on the site. The location has easy access to highways 880 and 680 and features a 30,000 square foot office component, as well.

The property, which is also known as Dixon Landing Business Park, is just south of two other parcels that may be developed for more housing. One of them will for sure; this the 10.7-acre site that Lennar had purchased in March of last year from Danville-based Trumark Homes for $25 million. That site had previously been called the Waterstone, and it had been approved in 2013 for demolition of two industrial structures totaling 105,100 square feet with adjacent parking lots. It had been approved for development of 84 single-family homes, which would bring Lennar’s cost to nearly $297,000 per unit. According to city documents, the redevelopment also proposed the construction of a six-foot tall, clear-span pedestrian bridge over Penitencia creek, which flows to the east of the development.

These parcels, while one of the better infill projects in the region, are not without controversy. In 2013 the Milpitas Planning Commission unanimously determined that the former Waterstone project, now owned by Lennar, was not consistent with the city’s general plan and its long-term land use strategy and recommended denial of development. While the city council approved the residential project 4-1 in October of 2013, it was noted that Mayor Jose Esteves dissented in that decision calling the project wrong for the area partly because of odors emanating from Newby Island Resource Recovery Park at 1601 Dixon Landing Road, just west of the proposed development.

KB Home, like Lennar, is a strong believer in the Bay Area region. Just a month ago, the company announced the grand opening of Artero, a 58-unit townhome community located in Livermore.

In San Francisco, the builder opened 72 Townsend in February of 2015, a KB Home Signature development of 74 upscale homes located in South Beach/SoMa district. As of December 2015, 30 of those homes have been sold. 1-bedroom homes sell for as high as $1.4 million, according to a December 2015 Polaris Pacific report on the housing market in San Francisco. The location has homes up to 3 bedrooms.

West Coast Commercial Real Estate News