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SAN FRANCISCO- Milpitas Industrial Properties Inc. has sold a 796,329-square-foot Silicon Valley industrial portfolio to a fund of Boston-based Intercontinental Real Estate Corp. for $67.9 million ($85 per square foot), according to CB Richard Ellis’ Northern California Institutional Group, which handled the disposition.

The portfolio includes seven industrial and flex buildings in three developments: Milpitas Industrial Park in Milpitas, CA; Fremont Industrial Park in Fremont, CA; and Mabury Industrial Park in San Jose, CA. The overall portfolio is approximately 94% leased. Credit tenants include Kraft Foods, Flextronics and Loomis Fargo & Co.

The portfolio’s low vacancy is due to its location in the supply constrained Silicon Valley and its proximity to the three Bay Area airports, the port and major freeways, according to the listing brokers, Bob Gilley, Steve Hermann and Joe Moriarty. Also making the investment attractive is the fact that in-place rents are approximately 20% below market, they said.

As of the end of September, the overall industrial vacancy rates in Fremont, Milpitas and San Jose were 5.6%, 5% and 3.5%, respectively. Lease rates ranged from the high $0.60s per square-foot per month in Fremont to the mid $0.70s in San Jose. Net absorption was negative in Milpitas and San Jose and positive in Fremont.

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