By Jon Peterson
Trammell Crow Residential is looking to start construction in 2019 on the 144-unit Alexan at Riverwalk apartment development in Danville. The total development cost on the project is $90 million.
“Our project will be the first new apartment development that has been approved by the city of Danville in a very long time. This is a market that has very high barriers of entry. Even our project took the better part of a decade to go through the full entitlement process, which just shows you how difficult the development process can be,” says Bruce Dorfman, senior managing director with Trammell Crow Residential.
The Danville market has very strong fundamentals for residential development. “Danville and the 680 Corridor is known as a place with very strong schools and significant amount of high-end housing, which leads to strong demand for apartment renters,” said Dorfman.
The developer had acquired the 3.75-acre site for the project last May for $20.4 million from Los Gatos-based The Stanley Group, according to public records. Most of the entitled work on the project was done by the seller. The site is located at 373 and 379 Diablo Road.
Trammell Crow Residential has been able to attract a number of large-scale capital sources to the development. “Our equity partner in the project is Barings Real Estate Advisers, and the construction lender is Wells Fargo,” said Dorfman.
The developer has already started the demolition work on the site. The property had a 50,000 square foot office building that was vacant and which has been demolished. With the project under way, Trammell Crow expects the new apartment complex to be completed sometime in 2020. The project will have a mixture of one, two and three-bedroom apartment units and two- and three-bedroom townhomes. The project does have an affordability component included, with 10 percent of the units allocated to be affordable.
Trammell Crow Residential has been active in the East Bay, and the developer is planning a unique project for next year that will be part of the Alameda mixed-use waterfront development on the former Naval Air Station. The project is part of Block 15 of the development and will deliver 70 apartment units that will all be rented by employed teachers in Alameda County.
“We have done these kinds of properties in other parts of the San Francisco Bay Area including Santa Clara and Redwood City. This development, we believe, would be the first of its kind in the East Bay from the standpoint of an apartment complex all rented to teachers,” said Dorfman.
Once the property is developed and stabilized it will be owned and operated by the city of Alameda. The 2.5-acres of land for the property will be donated to the city by Trammell Crow Residential. The rents in the property will be roughly 30 percent below current market rents for Alameda. The developer is now in the process of putting together the financing for the development.