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RICHMOND, CA-BioRad Laboratories Inc. has leased a 116,500-sf cross-dock warehouse a Pinole Business Park, taking the 475,000-sf park to 100% occupancy. The lease is prompting the expansion of the park by its new owners, Sares Regis Group, which in May paid $52-million for the existing assets and 43 acres of excess land that can hold an additional 600,000 sf .

Sares Regis did not reveal the term and rate on the lease. Sares Regis was marketing the warehouse for lease at approximately $0.50 per sf (NNN), which is about $0.05 higher than the local market rate for the space. The negotiated deal reportedly includes “several million” of tenant improvements to the space.

Pinole Point is at the intersection of Atlas Road and Giant Highway in Richmond, which lies north of Berkeley in the East Bay. The existing business park includes three warehouse and light-industrial buildings constructed between 1999 and 2001. At the time of sale, the existing buildings were approximately 80% occupied by six tenants, but negotiations were already under way with BioRad.

Given the tightness of the market, Sares Regis Group president Jeff Birdwell told GlobeSt.com at the time of acquisition that he will develop the buildings speculatively if necessary because he expects the space will be highly sought after once it’s under construction, if not before.

“The development opportunities on the adjacent land provided an added value play that we couldn’t pass up,” he said, adding that the investment is part of a larger plan for the company to “get back to its industrial roots.”

The expansion will consist of four new warehouse and light industrial buildings. Construction is scheduled to begin in the first quarter of 2009 with completion in early 2010.

Brokers Todd Severson, SIOR and Greig Lagomarsino, SIOR of Colliers International represented Sares Regis Group. Brokers Phil Garret and Brooks Pedder of Colliers International’s Fairfield office represented BioRad Laboratories in the deal.

Birdwell told GlobeSt.com in May that his company has been searching for ground-up industrial development opportunities in the Bay Area for a decade. Sares-Regis currently manages approximately 1.5 million sf of industrial space in the East Bay region, but it used to own a lot more.

“I did a couple of million sf of industrial in my early days with Sares-Regis in Southern California but as I moved north many of the opportunities were for higher-end R&D campuses,” he says. “I’ve been looking forward to a pure industrial opportunity in the Bay Area and this is the first one in the past decade that was compelling. To be able to acquire an existing development and to be able to develop 580,000 sf of additional space….”

The drivers for the Pinole Point site are its proximity to the Port of Oakland and highways 80, 580,and 880 corridors, the region’s major transportation corridors. Hercules, CA-based BioRad selected Pinole Point for those reasons, according to the brokers involved.

Industrial vacancy in the region is generally in the single digits and, according to Birdwell, there is simply no measurable competition for modern product that would be on a bit larger scale, with buildings north of 100,000 sf. “Richmond is really the first stop [from the Port] where you can offer new larger-scale buildings,” he says.

Birdwell is not disclosing the equity partner or its percentage interest in the LLC developing the site. The site is fully entitled for the expansion and the construction loan is in place. The acquisition and construction lender, Bank of America, is OK with moving forward on the project without any signed tenants, Birdwell says.

Whether the expansion goes up all at once or in phases is still under consideration. Birdwell says if not the entire thing then at least the majority of it will go up in the initial phase. “There have been requirements in the market lately,” Bidwell says. “We were approached while in due diligence by people interested in the existing property and for spaces larger than our current vacancies. We’re open to either lease or build-to-suit. We’ll launch a very substantive speculative phases and begin dialogue immediately with the tenant community.”

Sares Regis Group of Northern California and its affiliates, Regis Homes of Northern California and Regis Contractors of Northern California are regional companies based in San Mateo, California and are affiliated with Irvine-based Sares Regis Group. One of the company’s other ongoing projects in Northern California is Tower Plaza, a 12-story 200,000-sf class C office building in San Mateo that the company acquired last summer and is now repositioning as a class B asset by way of a $10 million improvement program.

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