SAN LEANDRO, CA—As mentioned in a previous article, Valley industrial projects can't be completed quickly enough. Some projects are going from close of escrow to construction in 18 months, depending on the city, according to the CBRE Oakland industrial team.
“There is a supply imbalance on 880 where the demand is far above what is being built,” Michael Barry, senior vice president, CBRE, tells GlobeSt.com. “There are tenants looking for 9.8 million square feet of space. It's a difficult market. The leasing is completed in many buildings before construction is finished.”
Regarding those sought-after projects under construction, there is 2.3 million square feet underway in Oakland/East Bay, 951,532 square feet in the 680 Corridor, 2.8 million square feet in Silicon Valley and no construction underway on the Peninsula for a total of 6 million square feet of industrial space construction at the moment, says CBRE. A couple of San Leandro developments and acquisitions provide examples of that urgency.
The San Leandro Business Center is a 30-acre industrial development by Principal Financial Group and Trammell Crow Company, consisting of three class-A industrial buildings totaling approximately 552,674 square feet. Targeting completion for summer 2018, these new high-tech buildings are strategically located ½ mile from three of the Bay Area's busiest trucking routes, Interstate 880, Interstate 238 and Interstate 580.
Building 3, totaling 293,940 square feet, will feature a 36-foot clear height. Building 2, 137,091 square feet, and Building 1, 121,643 square feet, will have 32-foot clear heights. All three buildings will showcase rear dock loading, ESFR sprinkler systems and generous trailer parking areas.
In addition, with a buyer specifically choosing San Leandro, a rare freestanding warehouse with a large fenced and paved yard recently sold for $12.5 million. The buyer was 4 FACEB Investment LLC and the seller was Heldig LLC. The 75,414-square-foot industrial building is located at 2300 Polvorosa Ave.
The CBRE Oakland industrial team of Barry and Bob Ferraro, senior vice president, represented the seller. David Yu and Jonathan Do with Maple Leaf Realty represented the buyer.
“We were excited to secure this successful outcome. The buyer had a strong interest in keeping their operations in San Leandro and owning its facility rather than leasing in this tough rental market with the submarket of Oakland/San Leandro at a historical low vacancy rate hovering around 1%,” shared Barry. “The property received strong interest from multiple buyers that created a competitive environment resulting in a record high price for a warehouse building.”
For the past 20 years, the facility has been the home of Intertile Stone. It has a 4-ton bridge crane system running the length of the building and three dock spots. The warehouse on 4.189 acres is located in the central East Bay within a mile from the Oakland Airport as well as in close proximity to the Port of Oakland.
“This is the hottest market in 30 years,” Ferraro tells GlobeSt.com. “Comstock's first new building in San Leandro is fully leased at rents never seen in this city. In addition, Tesla has been a big driver of demand, resulting in 40 electric car R&D, manufacturing and distribution facilities in the Bay Area.”
US industrial hubs posted the strongest growth in prime logistics rents for the past year, as demand for top-quality warehouses and distribution centers continued to outpace supply globally, according to the global industrial and logistics prime rents report from CBRE. The report found that prime rents in 70 major markets across the globe increased by 2.2% on average in first quarter 2017 compared to the same period a year ago. The past year's steepest gains came in the United States, where prime rents are low compared to other regions and demand is robust for distribution space amid the buildout of e-commerce-fulfillment networks. Five of the 10 markets with the biggest prime rent gains of the past year are in the US, including Oakland (up 9.3%). Two US markets cracked the 10 most-expensive markets: Oakland was ninth at $8.73 and Los Angeles/Orange County was 10th at $8.52.
“Third-party logistics companies are going vertical, basically, how many boxes can you get in a box?” Barry tells GlobeSt.com. “Even though they are paying more rent, they get long-term savings. The sprinkler and rack buildings are killing it.”
SAN LEANDRO, CA—As mentioned in a previous article, Valley industrial projects can't be completed quickly enough. Some projects are going from close of escrow to construction in 18 months, depending on the city, according to the CBRE Oakland industrial team.
“There is a supply imbalance on 880 where the demand is far above what is being built,” Michael Barry, senior vice president, CBRE, tells GlobeSt.com. “There are tenants looking for 9.8 million square feet of space. It's a difficult market. The leasing is completed in many buildings before construction is finished.”
Regarding those sought-after projects under construction, there is 2.3 million square feet underway in Oakland/East Bay, 951,532 square feet in the 680 Corridor, 2.8 million square feet in Silicon Valley and no construction underway on the Peninsula for a total of 6 million square feet of industrial space construction at the moment, says CBRE. A couple of San Leandro developments and acquisitions provide examples of that urgency.
The San Leandro Business Center is a 30-acre industrial development by
Building 3, totaling 293,940 square feet, will feature a 36-foot clear height. Building 2, 137,091 square feet, and Building 1, 121,643 square feet, will have 32-foot clear heights. All three buildings will showcase rear dock loading, ESFR sprinkler systems and generous trailer parking areas.
In addition, with a buyer specifically choosing San Leandro, a rare freestanding warehouse with a large fenced and paved yard recently sold for $12.5 million. The buyer was 4 FACEB Investment LLC and the seller was Heldig LLC. The 75,414-square-foot industrial building is located at 2300 Polvorosa Ave.
The CBRE Oakland industrial team of Barry and Bob Ferraro, senior vice president, represented the seller. David Yu and Jonathan Do with Maple Leaf Realty represented the buyer.
“We were excited to secure this successful outcome. The buyer had a strong interest in keeping their operations in San Leandro and owning its facility rather than leasing in this tough rental market with the submarket of Oakland/San Leandro at a historical low vacancy rate hovering around 1%,” shared Barry. “The property received strong interest from multiple buyers that created a competitive environment resulting in a record high price for a warehouse building.”
For the past 20 years, the facility has been the home of Intertile Stone. It has a 4-ton bridge crane system running the length of the building and three dock spots. The warehouse on 4.189 acres is located in the central East Bay within a mile from the Oakland Airport as well as in close proximity to the Port of Oakland.
“This is the hottest market in 30 years,” Ferraro tells GlobeSt.com. “Comstock's first new building in San Leandro is fully leased at rents never seen in this city. In addition, Tesla has been a big driver of demand, resulting in 40 electric car R&D, manufacturing and distribution facilities in the Bay Area.”
US industrial hubs posted the strongest growth in prime logistics rents for the past year, as demand for top-quality warehouses and distribution centers continued to outpace supply globally, according to the global industrial and logistics prime rents report from CBRE. The report found that prime rents in 70 major markets across the globe increased by 2.2% on average in first quarter 2017 compared to the same period a year ago. The past year's steepest gains came in the United States, where prime rents are low compared to other regions and demand is robust for distribution space amid the buildout of e-commerce-fulfillment networks. Five of the 10 markets with the biggest prime rent gains of the past year are in the US, including Oakland (up 9.3%). Two US markets cracked the 10 most-expensive markets: Oakland was ninth at $8.73 and Los Angeles/Orange County was 10th at $8.52.
“Third-party logistics companies are going vertical, basically, how many boxes can you get in a box?” Barry tells GlobeSt.com. “Even though they are paying more rent, they get long-term savings. The sprinkler and rack buildings are killing it.”
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