Industrial properties across the region are in high demand, but one recent acquisition by enterprise security firm Fortinet, which is likely for a future redevelopment opportunity, may be setting a new watermark. The company acquired a 59,000-square-foot building on a 10-acre site in Union City for $65 million. The appeal of this specific location can only be linked to the fact that it is next to another property at 1200 Whipple Rd. that Fortinet acquired in March of this year for $65.7 million.
The new acquisition was first reported by the San Jose Mercury News, and the location of the building is 1551 Atlantic St. The building is currently an operation for the Coca-Cola Bottling Company, and there is no indication this time what Fortinet is planning to accomplish with the site.
The seller of the property was an entity associated with DWS Group/RREEF, which purchased the property in December of 2021 for a mere $13,750,000. This 4.8X exit within 7 months for the seller was likely the deciding factor in the transaction.
Fortinet has been aggressively expanding across the Bay Area. In addition to the purchase in March when it paid $65.7 million, or about $254 per square foot, for the 258,470 square-foot property located at 1200 Whipple Rd. in Union City, the company also spent another $44 million to buy a 4.7-acre site at 1484 Kifer Road for about $340 per square foot. The property is currently developed with a single-story building constructed in 1979. It totals 129,587 square feet, according to a listing on LoopNet. The building features four interior dock doors, three drive-in bays, six exterior dock doors and 70 standard parking spaces.
The site is not far from Fortinet’s 172,000-square-foot headquarters, which broke ground in the summer of 2019. Prior to moving forward with the development, Fortinet had called Sunnyvale home for more than 20 years.
Fortinet is a leading global provider of network security appliances for carriers, data centers, enterprises and distributed offices, according to a statement by the company. Fortinet has over 6,000 global employees dedicated to the company’s mission to deliver the most innovative, highest-performing security fabric to secure and simplify IT infrastructures.