By Jon Peterson
If an investment group would like to expand its footprint in the Bay Area industrial market, a property recently placed on the market in Hayward could be the type of asset to satisfy such demand. Alex. Brown Realty along with its partner CIP has put on the market the 195,044 square foot Eden Landing Business Park with the pricing guidance on the planned transaction at $41.5, or roughly $212 per square foot, according to sources familiar with the asset.
The sellers are working on the marketing efforts of this asset with CBRE. Leading the sale efforts are Rebecca Perlmutter, executive vice president, and Darla Longo, vice chairman/managing director. CBRE declined to comment when contacted for this story.
If the pricing guidance is reached, the $212 per-square-foot pricing would fall well below replacement cost, which for similar assets to this one is pegged at roughly $460 per square foot, according to sources that track this data. The planned cap rate on the sale would be 4.75 percent, based on the property’s current net operating income.
The current owners have been the title holders to the property since November of 2017. The two firms had paid $25.75 million for the property at that time. The asset has the multiple addresses, which include 3401-3475 Investment Boulevard, 26203-26291 Production Avenue and 26010-26062 Eden Landing Boulevard. The 10-building asset was first construction in 1976 by The Koll Company.
The asset has a mixture of both warehouse and office space. 51 percent of the space in the property is office, while the remainder is warehouse. The property has a current occupancy of 91 percent, and rents in the property now are around 5 percent below market. There will be a chance to add some income to the property over the next three years. In 2023 and 2024, around a third of the buildings’ leases will be expiring. The asset has a variety of businesses as tenants, which include startups, transportation, medical services, tech service and assembly.
The current owners of Eden Landing have spent over $3.8 million in recent capital improvements to the property. This includes $2.05 million for building/exterior upgrades and $1.78 million for interior fixups/tenant improvements.
The property is considered to be part of the Hayward industrial market. The total square feet of assets in the market are 36.5 million square feet. The total vacancy in the market is 1 percent, according to sources that track this data. Last year, Hayward led the East Bay industrial markets with 757,877 square feet of total absorption, which represented 33 percent of the total 2.3 million square feet of absorption for the region.