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HIGHLIGHTS
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Communications Hill rises up out of the valley floor, adjacent to Highway 87 just south of downtown San Jose. Consisting of approximately 500 acres, the property is the largest undeveloped residential site in the city.
Borelli Investment Company was the first real estate firm to broker a development transaction on Communications Hill, selling a small parcel near the base of the hill in 1997. But putting together a larger transaction would require an extraordinary amount of creativity and determination.
CHALLENGE
While the City of San Jose was anxious to see development begin on Communications Hill, numerous obstacles stood in the way.
There were major infrastructure issues. Access roads would need to be constructed. Water was only available about halfway up the hill. In addition, massive grading and the addition of tons of topsoil would be required.
Complicating these efforts was the fact that the hill was divided into multiple parcels, owned by different individuals and entities. Paving the way to the needed infrastructure improvements would necessitate assembling a number of these parcels into a larger development site.
SOLUTION
Borelli Investment Company worked closely with the various property owners, other brokers, and its client, KB Home. In the end, Borelli played a key role in assembling seven parcels totaling approximately 125 acres with a combined sales price of about $30 million. Work on the land transactions began in the mid 1990s, with the seventh and final sale not closing until 2004.
RESULTS
KB Home moved more than 30 million cubic yards of dirt and invested over $100 million in infrastructure improvements — its largest capital improvement project in the company's history — to build Tuscany Hills, a community of more than 700 homes and three neighborhood parks. The development consists of condominiums, townhomes, and single-family homes that complement the natural hillside setting with classic Tuscan architecture. With up to 2,833 square feet of space, the residences meet San Jose's goal for high-density, relatively affordable housing. At today's prices, the project valuation at build-out will be approximately $350 million.
Borelli Investment Company's role in building trust and bringing the parties together — in at least one case on the strength of a handshake — helped to overcome the obstacles and make the beautiful KB Home community a reality.
"Borelli's hard work, extensive knowledge and impeccable integrity were essential to close a transaction of this complexity," said Robert Freed, President and Regional General Manager for KB Home-Northern California. "We have worked on many transactions together and consider Borelli Investment Company to be a key resource."
