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SAN LEANDRO, CA-Simmons Bedding Co. has inked an early renewal for a 236,500-square-foot manufacturing facility here that it has occupied for approximately 20 years, according to Jones Lang LaSalle, which brokered the deal. One of the largest renewals in the I-880 Corridor year-to-date, the lease commences in July 2010 upon expiration of the existing agreement. The building owner is Orton Development.

Local industry sources tell GlobeSt.com the value of the five-year, triple-net lease is approximately $5 million and includes flexible terms reflective of today’s tumultuous economic environment, such as the ability to shrink by a certain amount without penalty. The discount is in part reflective of the fact that the building, located at 1700 Fairway Dr., is not built to the standards of a modern manufacturing building.

Founded in Kenosha, WI in 1870 and now based in Atlanta, Simmons is the one of the largest mattress makers in the world. The company operates 21 bedding manufacturing facilities across the United States. The deal was brokered for Simmons by JLL senior vice presidents Kevin Ahaesy and Jason Ovadia, who head up the company’s Northern California logistics and supply chain division. While declining to confirm the value of the lease or its other negotiated terms, Ahaesy tells GlobeSt.com the early renewal is “a trend we’re seeing with larger corporate users recognizing a soft market and capitalizing on it.”

Vacancy in the San Leandro submarket is under 5% for the general industrial market and flirting with 12% for the warehouse market, according to Cornish & Carey Commercial/Oncor International. The comparable vacancy rates for the entire I-880 Coridor industrial market are 8.29% and 13.26%, respectively. The average monthly asking rates the entire I-880 industrial market are $0.42 per square foot per month for general industrial and $0.38 per square-foot per month for warehouse space.

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