The Daily Transcript: “Cornerstone has built more than 1,400 homes in 4 years”

Friday, February 11, 2022

By Thor Kamban Biberman

La Jolla-based Cornerstone Communities, which sold almost every home in its portfolio last year, is gearing up to develop several additional projects destined to bring at least 630 more homes to the San Diego market.

“We have built and closed more than 1,400 homes in the past four years,” Cornerstone CEO and Chairman Ure Kretowicz said. “That’s $850 million in sales and a lot of jobs. We are the largest privately held homebuilder in San Diego.”

Last year, Cornerstone closed escrow on 306 single-family homes and townhomes for a gross revenue of more than $206 million. The 306 units were in eight developments in San Diego County and the Inland Empire.

The developer has also expects to close out five more communities this year totaling 242 townhomes and 246 single-family homes.

Despite this activity, not only was the number of available homes the lowest it has been in decades, there are few signs that the shortage will abate in 2022.

“Even over the past few winter months, which are typically slow, demand for homes remained high,” Cornerstone stated.

Kretowicz said as more and more people started working out of their homes, the need for more space became that much more acute. And the definition of what is a home took on new meaning as people worked out of their dining rooms or spare bedrooms instead of coming into the office.

Something else became even more apparent than normal during the pandemic.

“That’s the high cost of land,” Kretowicz said, adding Cornerstone has to compete with the likes of publicly traded homebuilders like Lennar and Tri-Pointe Homes.

Looking ahead, Cornerstone is planning multiple projects, including a planned 450-unit development divided into “four villages” in the Otay Mesa/San Ysidro area that Kretowicz defined as “good workforce housing.”

It is being called “Candlelight,” although each neighborhood will have its own title.

The Candlelight project will consist of three-story townhomes with 3-bed/21/2-bath floorplans.

Kretowicz said many new homes today, including the $2 million tract homes that are becoming more and more prevalent, have virtually no yards. He said yards are an amenity that is still very much desired — and he is putting them in most of his projects.

Kretowicz said 370 of the 450 units at Candlelight will have private yards.

“Most of our competition doesn’t have private yards,” he said. “We know how important it is for homeowners to have a private outdoor space.”

Cornerstone is developing an 80-unit single-family project known as Laurel Heights in Santee, and a 30-home development known as Summit Estates in La Mesa, not far from Helix High School.

Laurel Heights will feature two-story townhomes starting in the mid-$700,000s. The homes will be fully solar homes as will the residences at Candlelight.

Summit Estates will be on 7,000- to 8,000-acre lots, and will have panoramic views, according to Kretowicz.

Cornerstone has several other projects in the pipeline, including new communities in Poway, Sorrento Mesa and San Marcos.

The Poway project, called McKee Orchard, will have 20 estate-sized homes ranging from 3,800 square feet to 4,600 square feet. The San Marcos development will have 44 townhomes.

Additionally, Cornerstone is planning eight executive homes in the Mira off Calle Cristobal in Sorrento Mesa.

Like other builders, Cornerstone had to change the way it sells new homes. For example, most builders in Southern California stopped holding open houses in 2020, limiting home tours to serious buyers on an appointment-only basis. That approach worked well for Cornerstone, which has no plans to go back to the old ways.

The management team at Cornerstone Communities is comprised of a seasoned group of development and building professionals possessing more than 150 years of combined experience in the homebuilding field. It has developed, mapped, and/or constructed more than 17,000 homes in 70-plus developments throughout California and Nevada.

Cornerstone’s competitors aren’t standing still. A number of new home developments are being developed by Lennar’s local division, often in conjunction with other builders. One of these is the eventual 1,800-unit 3Roots development in Mira Mesa/Sorrento Mesa that is a joint venture between Lennar, Shea Homes and California West Communities.

TriPointe (formerly Pardee) Homes is also very active in San Diego County with developments, including Pacific Highlands Ranch in Rancho Penasquitos, which will have approximately 5,400 units at buildout.

The Highlands is a segment within the masterplan community that will feature four- and five-bedroom floor plans ranging in size from 4,138 square feet to 5,051 square feet. The prices at that particular project range from the $2 million ranges.

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