By Meghan Hall
A well-known commercial real estate investor and developer has purchased an industrial asset in San Jose. In a deal that recently closed, LIT South 10th Street, an entity affiliated with Clarion Partners, purchased a factory building for $22 million, The Registry has confirmed. The asset was previously owned by Burke Industries, a manufacturer of environmental products and roofing systems.
Clarion paid all cash for the property. The asset is located at 2250 S. 10th Street. According to public documents, the building was originally constructed in 1959 and totals 115,930 square feet of space. The building sits on about seven acres of property. Clarion purchased the property with an eye for redevelopment, although those plans are not yet clear.
“With its ideal location near major airports and transportation arteries, the property offers convenient access to densely-populated areas,” said Clarion Partners Managing Director Michael Marrone. “Overall, San Jose is unique as a distribution location, and we feel confident in the long-term potential for future redevelopment.”
However, Clarion has been active in the purchase of other assets in the region, including 215 Fremont in San Francisco, which it purchased with LPC in 2019 for $335 million. In the same year, the firm also formed a joint venture with Seefried to buy 970 McLaughlin in San Jose for $15.15 million. There, the JV plans to build a 223,827 square foot, Class A logistics and advanced manufacturing facility.
The 2250 S. 10th Street property is located not far from downtown San Jose within a neighborhood with a number of industrial assets. Nearby businesses include The Decking Superstore, L&W Supply, Herb’s Collective and the San Jose Muffler Shop. The property is also not far from the Santa Clara County Fairgrounds and a shopping center anchored by major big-box retailers such as Best Buy, Target and Ross Dress for Less.
The first quarter of 2021 was not the Silicon Valley industrial market’s strongest, with the industrial sector posting negative 85,000 square feet of net absorption. Warehouse space ended at a negative 354,000 square feet, while demand for manufacturing surged, with the industry posting 268,000 square feet of net absorption. According to data from Cushman & Wakefield, while leasing activity is lower when compared to the first quarter of 2020 and vacancy increased to 5.5 percent, industrial product in Silicon Valley still remains attractive to both tenants and investors.