Core Builders

In Silicon Valley, affordability is relative. There, a home that might sell for around $100,000 in some areas of the country might cost more than a half-million dollars. “In the South Bay and Silicon Valley, in general, it is tough to find a property for $500,000,” Core Builders Director of Operations Chrissie Davis declares. “There’s no way one can purchase a single-family home for that unless it’s falling apart completely or in a transitional neighborhood.”

Encapsulating the state of the housing market in the South Bay, Davis says, “It’s screaming hot. The market is having a tough time keeping up with demand for housing in the Bay Area.”

The lack of affordability in real estate is driving South Bay residents to apartments rather than condominiums or single-family homes. “Affordability is an issue in the region we’re building in,” Davis concedes. “Our Willow Housing project for homeless and at-risk veterans will be complete in the next couple months ahead of schedule and on budget. It is a great, affordable project. The Bay Area is in dire need of more affordable housing.”

Affordable housing projects receive government funding and tax credits in addition to funding from other sources. “Willow Housing has at least 10 different funding sources,” Davis says. The affordability index is used to determine the level of rental subsidies the property owners receive. “Whatever the resident cannot afford, the government contributes as a subsidy to make up the difference,” Davis explains. 

The $12 million Willow Housing design/build project is scheduled for completion by the end of this year in Menlo Park, Calif. Its 60 apartments are distributed throughout a two-story woodframe structure that is built on a concrete slab on grade. The apartments provide benefits to veterans in need of safe and secure housing.

How High

The height of recent Core Builders projects varies from the two stories of Willow Housing to five to six stories for Linq Apartments at Newbury Park and three-and-a-half stories for Marquis in San Jose, Calif. “The owner designed the project with a partial underground garage so they wouldn’t hit groundwater,” Davis notes. Linq and Marquis apartments are market-rate rentals.

The height of projects is determined by several factors. “It’s the site conditions, water table, contamination, height restrictions on the building, building materials and the site size. Often, the project needs to construct underground parking to meet parking requirements,” Davis says. The exteriors of the three projects under construction are stucco, but Linq is a mix of stucco and siding. 

Core Builders constructs in-house projects for the company’s development team and also performs third-party work. “The development team is part of our parent company,” Davis explains. “There are three divisions – Core Residential, Core Homes and Core Affordable – so right now, we are building Willow Housing for Core Affordable. Core Residential is taking on Linq and Marquis.”

The $42 million, 230-unit Linq project in San Jose is due for completion next June. It is a joint venture with UrbanCo LLC. The $30 million Marquis project in San Jose is a three-story design/build project of 166 apartments that has recently been completed. It was also a joint venture deal with UrbanCo LLC. 

Finding Sites

With real estate so valuable, finding construction sites is challenging. “It is hard to find a site in the region,” Davis concedes. “Willow Housing was a parking lot attached to the VA Services Center in Menlo Park.” Marquis is being built on the former site of a warehouse, and Linq is being built on what was a tow truck lot in a transitional neighborhood close to the new Bay Area Rapid Transit station currently under construction for a 2017 opening. 

For some Core Builders projects, demolition and soil preparation is required. “It is hard to find a site in the Bay Area that doesn’t need remediation,” Davis maintains. 

Some of the sites had naturally occurring asbestos, pesticide contamination or underground obstructions such as old pipes, foundations and debris.

Core Builders usually does not self-perform work and typically works with third-party architects, engineers and designers. The architect for Willow Housing is VTBS Architects and for Linq and Marquis it is LPMD Architects.

The average Core Builders residential project may require anywhere from 60 to 80 subcontractors. “In some cases, we employ design/build techniques,” Davis says. “All three current projects are design/build. It helps ensure continuity between design and construction and brings the construction cost in line with the owners’ budget.”

Design/build also can help efficiency. “For Willow Housing – the affordable project – we worked to make the building as efficiently designed both structurally and architecturally so the team could add value to the property,” Davis explains. “The money saved was used on value-add items like roll-in showers for seniors. We worked on getting desirable and durable products at a lower cost instead of name-brand specifications. We worked with the design consultants and subcontractors in parallel.” 

In the future, the company plans to grow revenue upwards to $100 million annually and expand beyond the South Bay as far east as Tracy, Calif., north to Richmond, Calif., and south to Gilroy, Calif., as well as up and down the peninsula of northern California and perhaps to Los Angeles, as the need grows.

Davis attributes the success of the company to its “dedicated and hard-working staff. Our company takes pride in our work, and I think our products reflect that. We have great team members both on the job and in the main office. We’re very proud of our teams and all the work they put into the projects. We bridge the gap and provide continuity for developers to make schematic plans and ideas a reality in the most effective, efficient and constructive manner possible. We are committed to value and customer service.” 

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