By Jon Peterson
San Francisco-based Berkeley Partners has placed on the market for sale its six-property West Coast multi-tenant industrial portfolio. The potential price point on the entire portfolio is in the range of $100 million, according to sources that are familiar with the information on the trade of the portfolio.
The assets up for sale are located in three separate markets. Two of the properties are in the San Francisco Bay Area, two are in the Seattle region and two are in Southern California. The potential buyers of the assets have the option of buying the portfolio as a whole or purchasing individual assets.
The seller has selected CBRE to be the listing agent on the sale, and the team leading the initiative includes Darla Longo, vice chairman, and Rebecca Perlmutter, senior vice president. CBRE declined to comment when contacted for this story.
All of the properties in the portfolio are assets that are leased to multiple tenants. According to industry experts, this kind of industrial product is really not developed at a large scale any more. This is driven primarily by high construction and labor costs and the process of tenting multiple companies. However, this type of industrial real estate is still attracting strong rental rate growth, as stated by sources that track the performance of industrial properties.
The entire portfolio totals 666,423 square feet, and the overall occupancy of the assets is 87 percent. The properties do have staggered rollovers over the next four years. This includes 32 percent of the portfolio rolling in next year, 13 percent in 2021, 21 percent in 2022 and 5 percent in 2023. The new ownership has a chance to bring rents up to market level, since the existing rents are significantly below market at this point in time. In-place tenants have occupied their space for a weighted average time period of around 4.8 years.
The San Francisco Bay Area properties are located in Milpitas and Hayward. The Milpitas asset is the 1180 Ames Avenue property with additional addresses located at 1180-1260 Ames Avenue and 1025-1053 Sinclair Frontage Road. It totals 177,820 square feet, and it was developed between 1965 and 1966. Current occupancy is 82 percent.
The property in Hayward is the 49,834 square foot Corsair Business Park located at 20900-20988 Corsair Boulevard. The asset was developed in 1973 and it currently 90 percent occupied.
One of the properties in Seattle is the Lakewood Business Park in Lakewood located at 10025-10111 South Tacoma Way. The property totals 135,994 square feet and is 85 percent occupied presently. It was developed in two phases in 1978 and 1981. The other asset is the 48,000 square foot Anderson Center in Kent located at 8602-8714 South 222nd Street. The 1989-vintage asset is 87.5 percent occupied.
The other two properties in the portfolio are located in Yorba Linda and Moreno Valley.
Berkeley Partners focuses on the multi-tenant industrial market, because the market is large comprising 3-4 billion square feet with highly fragmented ownership, the company states on its web site. The market is underserved by institutional players despite demonstrating historically higher average occupancy and rental rates compared to the broader industrial market.