By Meghan Hall
Bridge Development has pitched plans for yet another industrial development in the Bay Area, this time targeting North San Jose. Bridge has proposed to build four warehouses totaling 700,000 square feet and is planning to pursue the project on a speculative basis, according to plans on file with the City.
The plans cover several properties at 2150 Commerce Drive and 2222 and 2350 Qume Drive. Public documents indicate the assets are currently owned by Becton, Dickinson & Company, a Franklin Lakes, N.J.-based medical technology company. In all, the properties total about 32 acres of land.
The properties are developed with several buildings that will be demolished to make way for new development. Under Bridge’s proposal, the buildings would range between 72,113 square feet and 352,240 square feet. The Class A spaces would feature dock-high doors as well as plenty of parking. The project will be designed by Herdman Architecture + Design Inc. Bridge Development declined to comment on the project at this time.
The assets are located near Interstate 680 and 880, as well as Highway 101. In a mostly commercial district, a number of major, big box retailers and distribution businesses are in the area, including FedEx, Costco, Target, The Home Depot and Safeway.
Since its entrance into the Bay Area market, Bridge has closed $364 million in transactions and its deals have included 922,000 square feet of space. Bridge Development broke into the market with Bridge Point Silicon Valley in Milpitas. The 34-acre development, which includes more than 722,000 square feet of space, was completed in the fourth quarter of 2020. The project has been 100 percent leased to Amazon.
Also underway is Bridge Point Oakland. Located on International Boulevard, the 534,208 square foot development will be completed in the third quarter of 2021, according to Bridge’s website.
The Bay Area’s industrial market has continued to rapidly expand over the past year, bucking concerns that have plagued other real estate sectors. In Silicon Valley, the industrial market saw its first quarter of positive net absorption since 2018 at the end of last year. The vacancy rate dropped from 4.54 percent to 3.96 percent, a sign of the sector’s growth.
End of year data from Newmark—the most recent currently available—saw asking rates jump to $1.06 per square foot, a historic high for the market. The end of the year was marked by large leasing deals. The largest transactions at the end the year were all in Fremont: Cepheid leased 178,910 square feet at Pacific Commons, and Orchard Therapeutics signed up for 152,995 square feet on Corporate Way. In the Trimble South submarket of San Jose, Amazon leased 31,000 square feet at 2256 Junction Ave.
San Jose also edged ahead when it came to investment, with the largest transactions take place in the submarket. Stone Avenue Partners purchased a 35,200 square foot property in Central San Jose for $8.5 million. In a similarly-sized deal, A&J Investments acquired 2219 Paragon for $8.43 million. The property totals 27,632 square feet.
Currently, San Jose has about 17.3 million square feet of industrial inventory. North San Jose—where Bridge is vying to build—has about 726,500 square feet of industrial space, making it one of the City’s smaller submarkets. At the end of 2020 it also had one of the lowest vacancy rates, at 3.12 percent, while rental rates sat at $1.29 per square foot.