Silicon Valley’s real estate boom echoes south, unfreezing Gilroy, Morgan Hill residential projects

Homebuilding is taking off in southern Santa Clara County.


The largest housing community ever proposed for Gilroy first surfaced in 1994. Only now, 20 years later, are the site’s first homes close to going up.

Infrastructure work for first section of Glen Loma Ranch, the 1,600-unit master-planned project in the “Garlic Capital of the World,” should begin this spring, city officials said. Standard Pacific Homes, the Irvine-based public homebuilder, is expected to build the phase, consisting of about 370 single-family detached units.

The activity is the most visible example that the South County cities of Gilroy (population 50,000) and Morgan Hill (population 40,000) are sharing in the residential recovery that is now well under way in Silicon Valley cities located to the north.

“It first started up north of us, but we’re now seeing — as usually happens — the effects get to Gilroy,” said Augie Dent, a land-use consultant for Glen Loma Group, the family-owned firm that has built numerous residential and commercial projects in the city including the Gilroy outlet mall. It also owns the 359-acre Glen Loma Ranch, which occupies a swath of pristine agricultural land between Santa Teresa Boulevard and Uvas Creek.

The region is different from Silicon Valley homebuilding markets in Santa Clara, San Jose and Sunnyvale, developers and city officials said. In contrast to rental-heavy cities to the north, for-sale dominates the South County market. Projects are usually smaller because of restrictive growth measures. And single family detached homes, rather than dense townhome and condo projects, are common.

The latter is especially attractive to homebuilders today, experts said.

“I think the reason we’ve had a lot of interest from the public homebuilders is they’re just not able to get detached to the north of us,” said John Telfer of South County Realty, who specializes in Morgan Hill. “They still feel there’s a strong demand for more traditional detached.”

Dustin Bogue, CEO of San Jose-based homebuilder UCP Inc., agrees. UCP recently sold out a small Gilroy project, Fairview at Eagle Ridge, and Bogue said he’s looking for more deals in the South County. He also likes Hollister in northern San Benito County, where UCP is selling a 20-unit community called Walnut Park.

“Morgan Hill, Gilroy and Hollister provide an opportunity for first-time buyers, move-up buyers, a small family to get a house that’s affordable with a backyard,” Bogue said. “We think long term that will do well.”

The residential markets of Morgan Hill (22 miles south of San Jose) and Gilroy (about 32 miles) are affected by growth-control measures that limit the number of new housing approvals that can be granted in one year.

In Morgan Hill, the city has granted about 250 housing allotments per year. “When the downturn occurred in 2009-2011, people continued to get their allotments but they didn’t build, so they asked for extensions,” said Andrew Crabtree, the planning chief in Morgan Hill. “That created a backlog pooling up. All of a sudden, we’re getting close to 400 units building. We’re looking at between 300-400 units a year for a couple years going through the building permit process.”

Jim Sullivan, a veteran residential developer who has done projects throughout the Bay Area, said the South County was hit even harder than the wider Bay Area during the downturn.

“The smart developers jumped into it when the prices were depressed, knowing the appreciation would follow,” he said. “Now Morgan Hill and Gilroy are both getting very good prices for homes.”

Telfer said residential lot prices sank about 40 percent in Morgan Hill during the recession from the peak of the market. But he says the market has recovered and is now above the peak achieved back in 2006. A single-family detached lot, ready to build, on 7,000 square feet of land in Morgan Hill is going for about $250,000, he said.

Glen Loma Ranch and another major project, called Hecker Pass, are the largest projects in the South County in years. Infrastructure work is already under way on Hecker Pass, a 425-acre area that is to include more than 500 units. Meritage Homes is working on the first phase of that project.

Glen Loma received its housing allotments from the city in the mid-2000s, but the economic crisis caused owners to press the pause button. “It’s been on hold waiting for things to pick up,” Dent, the project representative, said.

Construction should begin this summer. Dent expects a wide cross-section of buyers: Existing South County residents, refugees from higher-cost northern cities and first-time buyers.

“The markets in the South County are a function of the markets to the north, and job creation in Santa Clara County in general,” he said. “The fundamentals for both are very good. Gilroy is enjoying some of that.”

(Edited by: Baumann, Van Susteren)

Mobile marketing strategies for real estate: Responsive design and mobile-friendly website can help capture more business

by Marci James Contributor –

Mobile Marketing for real estate

89 percent of home shoppers use a mobile device during their search. Furthermore, 68 percent of them contacted a real estate professional based on a mobile search. And 21 percent of them found a listing agent based on their mobile search. Those are pretty staggering stats, and proof that real estate consumers are using mobile more than the average consumer. That also means that as a real estates professional, you cannot afford to ignore mobile users.

One of the most important things you should do to attract mobile users is to create a mobile-friendly website. Studies show that 79 percent of mobile users who find a site difficult to use will look for the information they need on another site and never return. That means if your competitor has a mobile site and you don’t, you’re sending them a ton of business. And you’re not even getting referral fees! But don’t panic, because creating a mobile-friendly does not have to be expensive, or even difficult. Sometimes it can be downright easy! Here are your three options:

  1. Simply change your template! If your website is on a WordPress template, then your solution could be as simple as changing your template to one that is “responsive.” A “responsive” website is fluid, and will automatically respond and resize itself based on the device that is being used to view it. You can browse through some WordPress responsive templates here.
  2. Build a mobile website. This is a “mini” version of your existing website. There are tons of mobile site builder applications that you can use to create a mini site just for mobile users. Most of these apps are simple to use and relatively inexpensive.  Some of my favorites are MobDisgoMobi and YoMobi. They offer a variety of easy-to-customize mobile templates. Once your mobile site is built, you simply add a bit of code to your existing website that detects and auto-redirects mobile users to your mobile site.
  3. Build a responsive website. If changing your website template to a responsive design is not an option, then you may want to simply start from scratch with a whole new website, built with a responsive design. This option is more expensive than simply building a mobile site, but it’s better for several reasons. Responsive sites are fluid, so whatever new screen size is the next big thing, your site will respond and work. And because there is no redirect of mobile users to a different site, it’s better for the overall search engine optimization (SEO) of your site.

Now that you know what your mobile website options are, you can choose one that fits your needs. But stay tuned, because before you actually build that mobile site, you should know exactly what mobile consumers want and need when they land on a mobile website.

Next week I’ll share a post with information and tips on what consumers are looking for on mobile websites. Building a mobile-friendly website is just one piece of your mobile marketing strategy. Another very important strategy is to make sure you are optimized for local search. Be sure to read my previous post, “3 key strategies to optimize business for local search on mobile devices.”

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49ers release Levi’s Stadium game schedule; What it means for Silicon Valley

49ers-Stadium-Footbal_HoroThe San Francisco 49ers have released the game schedule for their inaugural season at the $1.3 billion Levi’s Stadium in Santa Clara.
by  –

It’s here; the San Francisco 49ers have announced the schedule for the inaugural 2014 National Football League season at the new $1.3 billion Levi’s Stadium, inching Silicon Valley closer to confronting major remaining hurdles for stadium operations.

While the Santa Clara venue will officially open with a San Jose Earthquakes professional soccer game on Aug. 2, the Niners will take the field for preseason games beginning Aug. 17 and regular season play starting Sept. 14, according to a team statement. That gives the team and local public officials just a few more months to work through questions about short-term logistics and longer-term planning.

Scroll to the bottom of this article for the full game schedule, and click here for a new photo tour of the stadium.

A total of eight regular season 49ers games will be played at Levi’s stadium this year, with all but one date falling over the weekend — likely a reflection of concerns about intense weekday traffic congestion and a dearth of parking in the area. The stadium is located within a block of the Santa Clara Convention Center and situated near large offices for Citrix, Palo Alto Networks and Avaya, among other corporate tenants.

Game-day transportation and hotel availability in the area are other logistical concerns.

The team has pushed local fans to consider public transit options like the region’s notoriously unpopular light rail to maximize efficiency. Out-of-town fans will likely be able to find hotels over the weekend, but Santa Clara has seen weekday hotel occupancy and room rates jump in recent months.

Beyond concerns about traffic and parking, there is the broader issue of the return on investment for the city. Levi’s Stadium was initially financed with an $850 million loan from the Santa Clara Stadium Authority, which is made up of many city officials but is technically a separate entity.

Developers have already begun circling the stadium area for major new projects, but the question now for the city is how to convert that initial interest into new public revenue streams.

The venue has already been awarded the 2016 Super Bowl, and securing additional events like corporate functions, weddings and other sports events will be a primary strategic focus,the team’s executives have told me.

It’s also worth noting that the NFL’s flexible scheduling rules apply to games late in the season, which could shift game times on Sundays from the afternoon to the evening or vice versa.

Here’s the lineup for the inaugural 49ers season at Levi’s Stadium:

  • Preseason
  • Sunday, Aug. 17 at 1:00 p.m. – 49ers vs. Denver
  • Sunday, Aug. 24 at 1:00 p.m. – 49ers vs. San Diego

Regular season

  • Sunday, Sept. 14 at 5:30 p.m. – 49ers vs. Chicago
  • Sunday, Sept. 28 at 1:25 p.m. – 49ers vs. Philadelphia
  • Sunday, Oct. 5 at 1:25 p.m. – 49ers vs. Kansas City
  • Sunday, Nov. 2 at 1:05 p.m. – 49ers vs. St. Louis
  • Sunday, Nov. 23 at 5:30 p.m. – 49ers vs. Washington
  • Thursday, Nov. 27 at 5:30 p.m. – 49ers vs. Seattle
  • Saturday, Dec. 20 at 1:30 p.m. or 5:15 p.m. – 49ers vs. San Diego
  • Sunday, Dec. 28 at 1:25 p.m. – 49ers vs. Arizona

(Edited by: Lynch, Van Susteren)

Google and SunPower to invest $250M to help finance residential solar projects

solar energy panels

A $250M investment from Google and SunPower will support financing for residential rooftop solar panels.

Google Inc. and SunPower Corp. said today that they will invest $250 million in a new program that will provide financing to support residential solar lease projects, according to a press release.

Google committed $100 million to the project and San Jose-based SunPower put $150 million into it. The companies expect thousands of Americans to finance solar power systems through SunPower, joining the 20,000 already leasing from SunPower.

This is Google’s 16th renewable energy investment and its third residential rooftop solar investment. Google has invested more than $1 billion in renewable energy projects, which generate two gigawatts each year — enough to power 500,000 homes.

Americans think owning a home is better for them than it is


Some people never learn: Polls show that Americans still view their homes as the best and safest place to invest their hard-earned cash.

Gallup asked Americans this month to choose the best “long-term investment.” Real estate was the most common pick, ahead of mutual funds, bonds and other options. Similarly, Fannie Mae’s National Housing Survey asked Americans to assess whether various kinds of assets amounted to a “safe investment with a lot of potential.” As has been the case since before the financial crisis, “buying a home” beat out all the alternatives.

The fact that Americans still financially fetishize homeownership baffles me. Never mind that so many people lost their shirts (among other possessions) in the recent housing bust. Over an even longer horizon, owning a home has not proved to be a terribly lucrative investment either. Don’t take my word for it; ask Robert Shiller, winner of the 2013 Nobel Prize in economics who previously became a household name for identifying the housing bubble.

“People forget that housing deteriorates over time. It goes out of style. There are new innovations that people want, different layouts of rooms,” he told me. “And technological progress keeps bringing the cost of construction down.” Meaning your worn, old-fashioned home is competing with new, relatively inexpensive ones.

Over the past century, housing prices have grown at a compound annual rate of just 0.3 percent once one adjusts for inflation, according to my calculations using Shiller’s historical housing data. Over the same period, the Standard & Poor’s 500-stock index has had comparable annual returns of about 6.5 percent.

Yet Americans still think it’s financially savvy to dump all their savings into a single, large, highly illiquid asset.

Perhaps Americans just want to invest in something tangible. Real estate is, after all, real: bricks, mortar, wood, tile. Other kinds of assets seem more abstract, almost imaginary, by comparison. You just have to trust your financial adviser, bank or never-ending, entire-rainforest-killing Vanguard mailings that your other investments actually exist.

Shiller suspects that selective memory may also play a role.

“People remember home prices from long ago better than they remember other prices,” he says. “Ask anybody, ‘What did you pay for your home?,’ and they’ll remember even if it was 50 years ago. It will be some ridiculous number like $30,000. They then compare it to today’s prices, and it makes a big impression, and they forget there has been so much inflation since then.”

The tax code, alongside other public policy, forcefully nudges Americans toward investing in housing, too. The biggest bogeyman is the home-mortgage interest deduction. But the government effectively subsidizes home-buying in other ways, including through the Federal Housing Administration, Fannie Mae and Freddie Mac, and the fact that we don’ttax imputed rents — the estimated amount homeowners would have to spend to rent an identical property.

There are also large psychic benefits to owning a house, which Americans might conflate with financial ones.

Survey after survey finds that the vast majority of Americans see homeownership as apreferred lifestyle choice, a crucial part of obtaining the “American Dream ” and a requirement for membership in the middle class. Many families view homeownership as the best way to get their children into the right schools or most stable neighborhoods. Our national cultural reverence for homeownership is decades, if not centuries, old; as Pa Baileydeclared in “It’s a Wonderful Life,” there is “a fundamental urge,” something “deep in the race for a man to want his own roof, walls and fireplace.”

At least here in the United States, where only a minority of Americans prefers having a landlord and superintendent legally obligated to maintain their buildings and bear the risk if, say, Hurricane Sandy floods the basement. Americans romanticize the idea of owning their own roof, walls and fireplace, and they think they’ll make money off ’em, too.

The problem is that, perhaps because of tax incentives and ignorance about the financial returns from real estate investments, Americans are buying more house than they need or, in some cases, derive pleasure from. That incurs maintenance costs for the homeowner, not to mention other kinds of negative externalities for the rest of society (sprawl, traffic andgreater carbon emissions) that likely outweigh the individual “psychic benefits” of buying oversize houses. If nothing else, the recent financial crisis should have taught us that it’s not in the country’s best interest to enable every aspiring homeowner to buy.

As senators mark up legislation next week that would wind down Fannie and Freddie, expect great hue and cry about whether an overhaul of the mortgage system would make homeownership less affordable. But given the many other subsidies that exist, and Americans’ persistent misperceptions about the financial benefits of buying a house, maybe we can afford to make homeownership slightly less affordable.


Read more on this topic:

Erik’s DeliCafe, 30-location lunch spot, moves HQ to San Jose as it plans for growth

Screen shot 2014 04 18 at 12

Erik’s DeliCafe, the home-grown restaurant chain with more than 30 locations, aims to ramp up growth now that it’s moved over the hill.

The company known for sandwiches, soups and salads recently moved its corporate headquarters to San Jose’s The Alameda after spending decades in Santa Cruz. (Read more about Erik’s in this 2011 Business Journal profile.)

“We needed to be in the middle of the Valley and open an office that’s centrally located and easier to attract potential franchisees,” said Tony Bendana, chief operating officer for Erik’s. “We were tucked into this beautiful corner of the world, but it was a little tough to get people over the hill.”

It’s not the only news out of Erik’s, founded in 1973 in Scotts Valley by Erik Johnson. Erik’s just signed for its first corporate office-campus location — at Irvine Company’s Santa Clara Gateway office project— and for another location at Quito Village in Saratoga. Those are Erik’s 33rd and 34th locations, respectively.

“We’re at the point where we’re building two to three a year, which we think is perfect for the size we are,” Bendana said. “We’re also remodeling a lot of our existing stores in Cupertino, Watsonville and Los Gatos.”

On deck: Fresher, more modern interiors. “We’re just making it more comfortable,” he said. “We have some kitchens that were built a while ago.”

On the food front, Erik’s is bringing in panini sandwiches for the first time in all of its new and remodeled stores. “They’re healthy, fast, more of today’s palate that people are looking for,” he said.

David Taxin, a retail broker with Meacham Oppenheimer CORFAC International, signed Erik’s to Quito Village. He said the brand was offering a lot of the healthy-eating options so popular today before it was the going trend.

“They fill a niche, and if you don’t want to go to a Subway or a Togo’s, for the same price you can have something with a little different twist,” he said.

Erik’s has been a little late with order-ahead technology, which has propelled local competitor Specialty’s to huge growth among office workers. But expect that to change. Bendana said the new Santa Clara store will offer online ordering for the first time, and that could be rolled out to the other Erik’s locations.

Property Managers and Residential Housing Owners Need Protection

Umbrella and house symbolby  –

With a title like this you may think I’m about to encourage you get a bodyguard or a permit-to-carry.

While neither of those ideas are bad ones, I’m talking about reviewing your personal and business insurance. I’m also encouraging you to know your legal liabilities and your rights.

Concerning insurance, this is a good time of year to make sure of your limits of coverage, what your deductibles are, and how your insurance carrier ranks concerning claims and customer satisfaction.

It’s also a good idea to have your insurance agent do an annual review; both from the business side of your life and your personal coverage like your home, auto and umbrella policies.

Do you need disability insurance and how about life insurance? Every year you wait the higher the premiums will be for the same amounts of protection.

You’re in for some big surprises. How do I know? Because the insurance laws in each state have changed in the past year in numerous ways, you’re about to update your own level of awareness.

There are some forms of insurance protection that you don’t have or if you do they most likely need to be fine-tuned. Again this is because many new laws have been approved to either strengthen or weaken rental property owner’s rights.

In California alone there were at least 70 legislative bills introduced in 2012 alone that directly impacted rental housing. And some significantly limited the activities and prerogatives of landlords.

Ignorance of the Law is No Excuse

It is often erroneously believed that what you don’t know can’t hurt you. The opposite is true, and there are legions of lawyers, legislators and law enforcement personnel to make sure you find out firsthand.

The courts are jammed with thousands of cases in each state of property owners and managers who filed Unlawful Detainer cases seeking to terminate rental agreements.

The process of evicting residents isn’t getting less complicated. Yet this is a legal topic that is easily overlooked in our fast-paced property management responsibilities.

Again laws are morphing and renters-rights lobbies are forming. Recent reforms can and often do delay evictions and can even make them more expensive.

That’s why you need to know your rights and the rights of your clients. Be an advocate for justice and protection for your owners and your residents.

It builds trust and strengthens the integrity of your reputation.

Fines, penalties and other punitive actions can be avoided through a careful annual update of the latest rules and regulations. Check with and join your local apartment owners association and the Better Business Bureau. They often provide e-newsletter and updates on relevant issues.

The times we live in make it imperative that we consider our legal risks, the financial implications and if we know enough about the insurance we need.

Property insurance as well as the new rent default insurance called Aon Rent Protect should be considered. Offered by Aon (, the insurance offers landlords coverage in the event of a rent default.

The insurance also covers up to $1,000 for certain legal expenses in the event you or your clients must file for an eviction.

The California Association of REALTORS® (C.A.R.) has backed the Aon Rent Protect product. “Aon Rent Protect is a cash flow safety net for residential landlords…” said Robert Baily, Chairman of Real Estate Business Services, a subsidiary of the C.A.R.

Considering the increased possibility of eviction proceedings going to trial, funds for legal proceedings help landlords maintain a level of preparedness.

Knowing that you’re protected gives you and your clients the peace of mind that makes doing business that much more pleasant.