By Jon Peterson
California State Teachers Retirement System has funded $5 million of equity for the 24-unit Factoria luxury townhouse development in Bellevue, according to sources familiar with the project.
The pension fund made the investment as part of a partnership it has with Los Angeles-based The Resmark Companies. The real estate manager declined to comment on what capital sources it used for the project.
Factoria is a development being done in a joint venture with Resmark and Kirkland-based Windward Real Estate Services. Resmark is the majority equity provider and owner of the project. Winward has a small ownership position and handles all of the day-to-day duties of the project.
Resmark sees that in the city of Bellevue it’s very difficult to find land for new projects. “It remains very hard to find development sites in Bellevue for single-family homes. The barriers to entry in this area are very high. We feel very fortunate about the Factoria project. Its location is very strong as it has many great amenities including being within the district of Newport High School, which has a very strong academic record and being adjacent to the Marketplace at Factoria, a 60-store retail project anchored by Safeway and Target,” says Michael Zarola, senior vice president of investments for Resmark.
The all-in total development cost of the project is approximately $17 million. Gross homes sales in the project are projected to be around $20 million.
The groundbreaking for the project is planned to happen in late this year with the first closings of home sales set for the spring of 2016. The pricing on the homes figures to be in the range of $700,000 to $800,000. Resmark thinks the project will attract a couple types of buyers. “Given the school district that our project is located in, I would think we would get some families interested in our project. We also should attract some buyers who are technology workers in the Seattle area,” said Zarola.
The project has its lots split up with six duplex lots and four triplex lots. The townhomes in the project will range in size from 1,812 to 2,886 square feet. All of the houses have three bedrooms and three bathrooms with some having an additional single bath or two half baths.
Resmark would like to find more single-family projects in the Seattle area. “Some of the markets that we are looking at include Redmond, Issaquah, Bellevue and Bothell. Typically our projects would have gross sales revenue of somewhere in the range of $15 million to $100 million. The amount of equity that we would provide could be the neighborhood of $3 million to $20 million,” said Zarola.
Resmark currently works with one other company besides Winward Real Estate for its single-family projects in Seattle. This is Bothell-based Element Residential. The structure of this relationship is that Element is more of a fee developer than an actual part owner of the project.