Pulte pays $52M for approved Sunnyvale townhome site

Sobrato Family Foundation sells parcel entitled for 135 for-sale homes

PulteGroup's Ryan Marshall and rendering of 1139 Karlstad Drive (LinkedIn, KTGY, Getty)
PulteGroup's Ryan Marshall and a rendering of some of the townhomes approved for 1139 Karlstad Drive (LinkedIn, KTGY, Getty)

PulteGroup has acquired the site of an entitled townhome development in Sunnyvale for $52 million, a property that was previously approved for almost twice as many apartments and was once part of failed construction startup Katerra’s project portfolio.

The Atlanta-based homebuilder paid more than $385,000 per approved unit to purchase the 5-acre site at 1139 Karlstad Drive from the Sobrato Family Foundation, documents filed with the Santa Clara County Clerk-Recorder’s Office on Wednesday show. The property is a vacant parcel where an industrial building once stood. It sits between highways 237 and 101 and is surrounded by three-story townhomes and apartments.

The city approved plans by The Sobrato Organization, the foundation’s parent, in May 2021 to build 135 townhomes in more than a dozen three- and four-story buildings. Roughly 12 percent of those homes, 16 total, would be set aside for people on moderate incomes. Mountain View-based Sobrato’s development group filed grading and plumbing permits earlier this year but none for construction, according to Sunnyvale’s online permit portal.

Representatives for Sobrato and PulteGroup didn’t respond to requests for comment.

Sobrato Organization affiliates and trusts controlled by its founder, John Albert Sobrato, had owned the Sunnyvale site since 1992, title service records show. One of those trusts donated it to the Sobrato Family Foundation, the main grant-making vehicle of the organization’s philanthropic arm, in August 2021.

Sign Up for the undefined Newsletter

The deal expands Pulte’s portfolio of approved and under-construction homes in Silicon Valley to nearly 500. It’s building 356 townhomes and condos in nearby Santa Clara and San Jose, most of which are on the site of a mobile home park on the latter city’s west side that’s being redeveloped into a mix of rentals and for-sale units.

Sunnyvale’s condo and townhome market is among the strongest in Silicon Valley, with this year’s sales numbers on pace to finish slightly below last year’s $673 million in total sales volume. Nearly $50 million in condos and townhomes sold there last month, second only to San Jose in Santa Clara County, according to July Santa Clara County Association of Realtors data.

The Karlstad Drive site featured as a footnote in the story of Katerra, a SoftBank-backed construction startup that once had $15 billion worth of building projects before filing for bankruptcy last year. Sobrato became one of Katerra’s customers in 2017, when the property’s then-owner received planning approval to redevelop it into a 250-unit apartment building. The two sides clashed over pricing, among other issues, people familiar with the matter told The Information in 2018.

Sobrato confirmed to The Real Deal in 2019 that the two were no longer working together on any of its projects, including 1139 Karlstad Drive. That same year, Sobrato filed plans with the city to develop the site into townhomes, a new vision for the property that swapped out the previously approved apartments for for-sale homes.

Read more

Lennar co-ceos Jon Jaffe and Rick Beckwitt with the project at 3401 Crow Canyon Road in San Ramon (Lennar, Google Maps)
Residential
San Francisco
Lennar plans 117 homes in place of commercial in San Ramon