DCT Spends $15MM for Existing Asset and Land for Development in East Bay

By Jon Peterson

Denver-based DCT Industrial Trust has closed on two transactions in the East Bay for $14.975 million, as stated by sources familiar with the company’s new investment activities.

The assets are located in San Leandro and Hayward. “Both deals that we did are in industrial markets where there is little vacancy, and there is much more demand than there is space available for tenants. We are confident that we can fill the space for these assets,” says Bud Pharris, managing director of the Western Region for DCT.

The public REIT paid $7.1 million to acquire a 37,000 square foot industrial property in San Leandro located at 2501 Davis Street, as stated by the investor in its 2018 first quarter earnings report. The seller was a private owner, an entity associated with the Ibrahimi Family Trust, according to public documents, and the listing agent on this sale was Chris Van Keulen, a vice president with CBRE in its Oakland office. He did not respond to phone calls when contacted for this story.

This property is considered to be a value-add acquisition for DCT. The property was 100 percent occupied at the time of the sale. The seller was the current tenant in the building who will be vacating the site in the third quarter of this year. The new owners now have the property on the market for lease at no less than $.85 per square foot triple-net with an October 1, 2018 delivery.

Once the property is leased up and becomes a stable asset, DCT projects that the investment will produce a 4.6 percent cap rate, as stated by the public REIT in its latest earnings results.

In addition to that asset, DCT has also acquired five acres of land in Hayward for $7.875 million or $36.50 per square foot for its next industrial development in that market, as stated by sources that track the sale of industrial assets in the East Bay. The parcel is located at 31500 Hayman Street. The seller of this asset was San Francisco-based D.R. Stephens. It was represented in the sale by Jesse Lucas, a principal with Lee & Associates out of its Oakland office.

The land will be used to construct an approximately 103,000 square-foot industrial building. The building can be divided into two spaces, so it could accommodate as many as two tenants. The property will have around 4,000 to 5,000 square feet of office space, as well. The project will be known as the DCT Hayman Logistics Center. It has not been established at this time when the project will be started.

“The size of the is project should fit in with most of the tenant demands in the market. Most industrial tenants in this market are looking for space in the range of 25,000 to 100,000 square feet, which should fit in well with our project,” said Pharris.

Both of these properties will become part of San Francisco-based Prologis in the future. The public REIT’s planned $8.4 billion acquisition of DCT is projected to close in the third quarter of this year.

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