Misawa Homes Co., Japan’s top residential builder,...

Misawa Homes Co., Japan’s top residential builder, will launch a 10-year development near San Francisco, with sales targeted at $733 million.

The Tokyo-based company plans to turn the Sky Valley district in Vallejo, 33 miles northeast of San Francisco, into a large-scale housing and resort area.

Initially, the company said, it will develop 628 housing lots, 142 condominium units, a pool, shopping malls and an 18-hole golf course designed by Arnold Palmer. An additional 680 housing units on 280 acres will be developed in the second stage, the company said.

The company said it purchased 1,340 acres at Sky Valley from Sky Valley Limited Partnership for $133.3 million.

It said the project will be promoted by its U.S. subsidiary, Sky Valley San Francisco Limited Partnership, which was launched last week by Misawa Homes and Misawa Homes of America Inc.