Harsch Buys Pair of East Bay Industrial Parks

Harsch's Bay Area regional manager Nancy Gille tells GlobeSt.com that the parks are well leased due to their range of building types and proximity to the Port of Oakland, San Mateo Bridge and Interstate 880. Given the movement in rents the past few years, the upside in this investment will come in the form of increased rents as leases roll, Gille says."These are core assets," she says. "A rising tide raises all ships; we expect to ride the tide of improving conditions in the region."

The larger of the two is Dowe Business Park, a 10-building park at the northwest corner of Alvarado Niles Road and Dowe Avenue in Union City. Built in the latter half of the 1980s, it totals 353,763 sf (net rentable). The buildings range in size from 16,274 sf to 53,199 sf and are built out for office/flex, R&D and light industrial uses.

The property was 89% leased to 37 tenants at the time of sale. Tenants include Federal Express, NEC Tokin, Coinmach Service, Penta Biotech, Macusight, Bexel Pharmaceuticals and Fidelity National Title.

Polvorosa Business Park in San Leandro consists of three office/flex and industrial buildings totaling 92,254 sf. It was built in 1987 on 5.6 acres located just south of Davis Street at the corner of Doolittle Road and Polvorosa Avenue. The property was 100% occupied at the time of sale to 13 tenants. Tenants include Sutter Health, State of California, Qualguard, BridgePoint Systems, TiNi Aerospace and California Teachers Association.

Erik Doyle, Robert Gilley, Steve Hermann and Doug Norton of CB Richard Ellis brokered the transaction. Doug Norton and Conor Famulener of CBRE have the leasing assignment for both properties. Prior to the sale, leasing was handled in-house by Chamberlain, Gille says.

Excluding retail, Harsch owns about 1.5 million sf of product in the Bay Area. About half of that total is industrial construction, most of which has been built out for office and light industrial uses more than anything else, Gille says.

At the start of the year, average industrial vacancy in the 52-million-sf Union City/Hayward market was 5.5% and the average triple-net asking rates were $0.42 per sf per month for warehouse and $0.79 for R&D/flex space, according to Grubb & Ellis. In the 20-million-sf San Leandro/San Lorenzo market, vacancy was 4.3% and the average asking rates were $0.43 per sf per month for warehouse and $0.95 for R&D/flex space, according to G&E.