Service West is an independent contract furniture installation company. It will use the building to consolidate operations currently spread among three buildings totaling 200,000 square feet.
CBRE says the move to 2054-2070 Burroughs Avenue in San Leandro allows them greater flexibility as well as reduced overall cost. The purchase will allow Service West the option of future expansion while also reducing its overhead by over 30%.
"The purchase…will allow Service West the option of future expansion and reduce their overhead by over 30%," states CBRE. "Service West's current pallet capacity in its three existing warehouses is 8,000 pallet positions due to low clear height buildings. The new Burroughs Avenue warehouse with the high clear height will allow a capacity of 13,000 pallet positions."
CBRE senior vice president Michael Barry brokered the purchase. The seller was represented by Rich Sutherland of The Sutherland Co.
Service West was able to use a new program within SBA financing allowing an ownership to double the allotment of funds to $4 million provided the new facility can demonstrate a reduction on energy efficiency of a minimum of 10% from its existing facility, says CBRE. The property has already demonstrated a 30% energy savings, allowing Service West to tap into the SBA financing through TMC Development in San Francisco and along with Service West's new lending partner, Bank of America.
The 22.6 million square-foot San Leandro industrial market posted a second quarter vacancy rate of 7% and a total availability rate of 11.6%, according to CB Richard Ellis. The average asking rate for warehouse space was $0.41 per square foot per month. Asking rates have fallen approximately 9% from the first quarter.
In other East Bay industrial investment news, LRF properties recently sold two neighboring industrial buildings in nearby Hayward, CA totaling 66,612 square feet for $5.5 million, which also works out to $83 per square foot. The buyer was Wallace Lee, dba Wigs America. The buildings are located at 27279-27317 Industrial Boulevard. Jay Hagglund and Sam Higgins with NAI BT Commercial Oakland represented LRF.
The latest East Bay industrial leasing news is that Guardian Logistics Group has made a long-term commitment to 115,000 square feet of a 220,000 square-foot, cross-docked building at 2399 West Winton Avenue in the Hayward Crocker North Industrial Park in Hayward, CA. the building was originally used as Mervyns Headquarters. It has also been occupied by Kimberly Clark. Most recently, it housed Restoration Hardware. Greig Lagomarsino and Casey Ricksen with Colliers International in Oakland represented the tenant.
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