By Jon Peterson
Owners of industrial real estate in the East Bay are attracting new tenants to their properties. Glendale, Calif.-based PS Business Parks and New York City-based New York Life Real Estate Investors have both recently signed new tenants to its properties in the East Bay.
PS Business Parks has signed FBA Holdings Inc. to a lease of 64,800 square feet into the Hayward Business Park in Hayward located at 30803 Santana Street.
New York Life has completed a transaction with Antique Revival/Stool International for a 34,272 square feet lease in the Fremont Distribution Center in Fremont. This property sits at 47650-47654 Kato Road.
PS Business Parks completed the deal in Hayward through its leasing agent Colliers International. The agents involved were Greg Lagomarsino and Rick Keely. These are both senior vice presidents who work in the company’s Oakland office.
Dick Scott, divisional vice president for PS Business Parks, declined to comment on the lease terms with FBA Holdings. He works out of the company’s regional office in Santa Clara. According to sources familiar with the transaction, the lease runs for 63 months at an effective rate of $0.39 NNN and includes three months of free rent.
“The lease terms for tenants in the East Bay can vary from one deal to the next. It’s not all that unusual for some free rent to be given out in today’s marketplace,” said Lagomarsino.
FBA Holdings is a subsidiary of Sears Holding Company. The company’s new lease in Hayward is definitely seen as an expansion. The tenant will be moving from its current 27,000 square feet lease in the Pinole Point Business Park in Richmond. The new location will be used for the company’s regional distribution headquarters.
The Hayward Business Park is a 600,000 square foot property. “This property is now 90 percent occupied. This property has an excellent location near the 880 Freeway. This allows tenants to move their products on a regional distribution basis,” said Scott.
Based on data supplied by Colliers International, the lease with FBA Holdings would seem pretty close to a market rate deal, and the occupancy performance of the property is doing better than market average.
Colliers in its third quarter market report stated that average asking rents for warehouse space in Hayward were $0.38 per square foot on a NNN basis. The rents have remained the same since the end of 2012. Vacancy rates for the same time period in Hayward for warehouse properties were 10.7 percent. The same were at 9.5 percent at the end of last year.
The lease in Fremont with Antique Revival means that the company will be moving from its current location in San Jose. The tenant will be using the new space for sales and distribution of its products.
The lease with the tenant runs for seven years. New York Life declined to comment further on the lease terms for this transaction.
“This property is located near the 680 and 880 Freeways. This gives our new tenant and the existing ones a good location for regional distribution purposes,” says Michael Hamilton, asset manager with New York Life in its San Francisco office.
The investment firm has owned the property since 2004. The asset is in the company’s core open-ended commingled fund, The Madison Core Property Fund. This investment entity has assets with a net asset value of $1 billion.