DCT Pays $30.5MM for Two Industrial Assets in Hayward

Holliday Fenoglio Fowler, Pacific Distribution Center, Keystone Corporation, WPT Capital Advisors, Central Valley, Holliday GP Corp,

By Jon Peterson

Denver-based DCT Industrial Trust paid $30.5 million to acquire 448,000 square feet of industrial space in Hayward, according to sources familiar with the property. This transaction involved two properties located at 22290 Hathaway Avenue and 22300 Hathaway Avenue.

22290 Hathaway was actually a 394,000 square foot building that is currently vacant. It will be redeveloped into a building that will be 100,000 square foot smaller. 22300 Hathaway is a 154,171 square foot building that is 100 percent leased now and will be for some time.

[contextly_sidebar id=”XX9H2NbOgw0S9ZPOfSAeRlO06US9aYsS”]DCT stated in its first quarter 2015 results that the anticipated yield on the deal in Hayward is 5.8 percent. This would be a projected stabilized cash yield.

“We think that the property that we acquired is in a perfect location for industrial real estate. It’s located just off of I-880 and is near the 92 and 238 Freeways. This will allow our customers to move their product around to many parts of the San Francisco Bay Area,” says Dave Haugen, a vice president in the Northern California region for DCT. He works out of the company’s regional office in Emeryville.

He is a big believer in the Hayward industrial market. “Hayward is on fire as an industrial market. It has now achieved an all-time record low for vacancies and all-time record for rental rate growth. For a long time the area has had very strong infrastructure in place that industrial users can take advantage of. Hayward is a challenging industrial market to add new product into. About the only way to do this is like what we are planning on Hathaway. This is by purchasing an existing building and to re-develop it,” said Haugen.

DCT is planning to make some major improvements to 22290 Hathaway. This will include a new roof, new ESFR sprinklers and 28 feet of clear height. The property could accept multi tenants into the building but the space could also accommodate a single tenant. The property could attract e-commerce or distribution types of uses.

The work on this building will start in about 60 days. It should be completed with the work by the end of the year. The leasing efforts on the project will be led by the Oakland office of DTZ. One of the listing agents will be Jeff Starkovich, a managing principal with the firm.

DCT is a major industrial player in Northern California. According to its first quarter 2015 earnings report, the publicly traded real estate investment trust owns 29 buildings in the market totaling a little over four million square feet. Its portfolio occupancy in the region is at 98.8 percent.

The investor will continue to look for more industrial properties in the region. It seeks deals in three major areas. This would be the San Francisco Peninsula, the East Bay and the Central Valley region that includes Stockton, Tracy and Lathrop.

West Coast Commercial Real Estate News