$34M Condo Project Launches Hearthstone, SilverStone Partnership

CUPERTINO, CA-Hearthstone, a major investor in residential projects, is joint venturing with SilverStone Communities, a young company of former Legacy Partners SVP John McMorrow, for the development of a four-story, 80-unit condominium development. To be called the Civic Center, the building is planned for 2 acres at the intersection of De Anza Boulevard and Town Center Lane. Upon completion at the end of 2006, it will contain 20,000 sf of street-level retail, 12 two-story townhouses and 68 flats. McMorrow says the new relationship between the two companies is expected to be a long-term one. “We will do all of our deals with Hearthstone going forward, I believe,” he tells GlobeSt.com. Hearthstone manages funds for numerous public and private pension plans, university endowments, Fortune 100 companies and large private trusts. Hearthstone invests these funds in homebuilding and residential lot development projects throughout the United States. SilverStone specializes in the acquisition and construction of higher density condominium communities close to transportation, freeways, schools, shopping, entertainment and recreational venues.Hearthstone is providing 100% of the development cost of the project, which totals $33.7 million. The retail value of the building is about $46 million. SilverStone will receive a fee to build the building as well as a percentage of the net profits, says McMorrow.Priced from the $490,000s to $650,000s, the 80 condominiums range in size from 743 sf to 1,654 sf. The 1,444-sf townhomes are expected to be priced from the $620,000s. McMorrow says he expects the units will be 50% sold off by the time the project is complete. The retail portion of the development will eventually be sold off to an investor, he says.At Legacy, McMorrow focused on urban infill, high-density and transit-oriented apartment development. “I wanted to switch and get into for-sale product,” he tells GlobeSt.com. “The Bay Area today is more attractive as a for-sale market than a rental market.”