Exclusive: Invesco, Overton Moore Properties, Close on $220MM Loan for Refinancing of Fremont’s Pacific Commons South

CBRE, Overton Moore Properties, Pacific Commons South, Fremont, Invesco, Amazon, Cepheid, Sana Biotechnology,

By Meghan Hall

A major financing deal has closed providing insight into the health of the Bay Area’s industrial market. A joint venture of Overton Moore Properties and Invesco have closed on a $220 million loan for the refinancing of Pacific Commons South, a 1.9 million square foot industrial asset located in Fremont. 

The financing was arranged by CBRE Capital Market’’s Debt & Structured Financing Team, including Brad Zampa and Mike Walker. The financing was provided by a life insurance company on a 12-year, interest-only basis, according to CBRE.

“There was no surprise in the tsunami of interest we received from both banks and life insurance companies in this exceptional financing opportunity,” said Zampa in a statement to The Registry. “The amount of liquidity in the industrial sector is truly astonishing.”

The property is composed of seven “state-of-the-art” buildings and a 10.35-acre parking lot. Buildings include 28-foot to 36-foot celar heights, build-to-suit office space, as well as numerous outdoor dining and break areas and pedestrian paths. The buildings are a mix of advanced manufacturing and warehouse space. The project also includes a 2.5 percent skylight ratio and is 100 percent solar roof capable.  

“Pacific Commons has attracted a best-in-class roster of tenants from within the technology- and life science-related fields,” explained Walker. “With top tier sponsorship, blue chip tenants and this location, it is not surprising we had capital competing aggressively to win this opportunity.”

Overton Moore and Invesco broke ground on the project in 2018, after the pair acquired the site for 123.33 million, according to public records. Phase One of the project included one million square feet of space. Phase Two, which included the remaining square footage and the addition of 275 ChargePoint electric vehicle chargers, broke ground in June of last year. At the time that Phase II kicked off, Pacific Commons South was 60 percent pre-leased with about 678,000 square feet of space remaining available across six buildings.

Currently, five of the project’s seven buildings are fully-leased. The asset’s tenants include Amazon, who is reportedly in the works to take Building 3, which totals 369,180 square feet, according to public documents on file with the City of Fremont. In the second quarter of 2020, Cepheid agreed to lease 178,910 square feet at 44409 Pacific Commons, based on  comps obtained by The Registry. Most recently, in July, Sana Biotechnology signed an agreement with Overton Moore and Invesco to take 163,193 square feet at 5567 Cushing Parkway. The term of the lease is ten years, according to a Securities and Exchange Commission filing. The parking lot, stated CBRE, has been fully leased as well to a number of institutional-grade tenants. 

The development is located in the Warm Springs District submarket of Fremont, close to I-880 and the Warm Springs BART Station. In recent months, a number of major tenants have moved into the area, including Facebook, who expanded its Fremont footprint with 226,000 square feet of new leases in November of 2020, and UPS, who signed up to take 814,901 square feet of space at the Pacific Commons Industrial Center in 2019.

Like many markets in the Bay Area, the Fremont industrial sector remains hot. Vacancy rates among industrial properties sits at about 4.8 percent, according to CBRE, and lease rates have risen 83 percent since 2014. These fundamentals are expected to improve due to an extremely limited supply of undeveloped land and Fremont’s growing status as a hub for advanced industrial users, manufactures and life sciences companies.

West Coast Commercial Real Estate News