One of the most notable characteristics of an attractive asset these days is one with a credit-worthy single tenant with a long term lease. Add to that the 100 percent net zero solar energy flex-tech-manufacturing R&D space that the property offers, and you can see how it may draw interest from buyers across the region and beyond. The buyer, an entity associated with Dublin, Calif.-based Landmark Exchange Management, paid $29.6 million, or roughly $360 per square foot, to acquire the 82,408 square-foot property from Sharp Development. The sale closed on November 18th, according to public records, and a $16 million loan secured the purchase for Landmark. The cap rate on the transaction was 5 percent.
The sale was brokered by Dan Bergen and Jason Allen, and the financing was arranged by Jim Henderson, all from Kidder Mathews.
Sharp Development was founded by Kevin Bates in 1994 and had its base in Portola Valley for a number of years. The company’s focus has been on retrofitting existing commercial buildings to net zero energy, with carbon neutrality and a strong emphasis on the health and wellness of the interior environment for the occupants, according to the company’s web site. The property, which is located at 47951 Westinghouse Dr. in Fremont, is fully leased to Sonic Manufacturing Technologies.
The building is believed to be the first Net Zero Energy Bill manufacturing building in the US, according to the property’s flyer. It generates roughly 1.6 million kWh of electricity on site while delivering resiliency to the occupant and insulating it from future rate increases. Environmentally, it offsets the burning of over 95 million gallons of gasoline over a 20-year period, representing 862,000 metric tons of CO2 emissions, states the property’s description.
Fremont has emerged as a very attractive submarket of the Silicon Valley commercial real estate industry. It has attracted a wide range of buyers in recent history, and the tenant based has been diversifying from industrial and manufacturing occupiers to office and life science tenants. According to recent reporting by The Registry, some transactions in the last few months include Invesco and Lincoln Property Company purchasing two buildings within Fremont’s increasingly popular Ardenwood District for $85 million, CenterPoint taking two industrial buildings totaling 208,180 square feet a 13.69-acre site for $86 million, Essex Property buying The Rexford Apartments in Fremont for $112.5 million and New York-based AWH purchasing the Hilton Garden Inn Fremont Milpitas for $38.9 million.
The recent appeal of the city certainly started with Tesla’s activity there in the last decade and the development climate of the city’s staff, which has helped developers reinvigorate the city. Fremont is the 4th largest city in the Bay Area and 15th largest in California, and it attracts a diverse number of employers. With the opening of the Fremont Warm Springs/South Fremont BART station in March 2017 and the implementation of the Warm Springs/South Fremont Community Plan, the city bills itself as a vital and modern zone for 21st-century American industrial production.