(EDITOR’S NOTE: According to sources familiar with the deal, the sellers were private owners and the cap rate on the deal was 3.5 percent. The deal originally closed in October.)
Institutional buyers show strong favor for well-located industrial assets.
Fremont, Calif. – Leading diversified professional services and investment management company Colliers announced the successful sale of an industrial warehouse in Fremont at 47550 Kato Road for $80,000,000.
Colliers’ Executive Vice President Ed Hofer and Senior Vice President Casey Ricksen represented the seller, CW Kato LLC, and procured Fortress Investment Group LLC as the buyer. Fortress Investment Group LLC is a leading, highly diversified global investment manager with an expanding portofolio of business in the Bay Area.
At the time of the sale, the 259,737 square-foot warehousing/distribution center was leased to a tenant with less than five years remaining on their lease.
“Fortress Investment Group’s acquisition of 47550 Kato Road is just one of many transactions contributing to the industrial sector’s dominance above all other asset classes,” said Hofer. “On top of the fact the asset’s prime location in a core market, the building was sold for a relatively low cap rate given its age and length of the tenant’s lease.”
As the Silicon Valley’s second-largest submarket for industrial activity and supply, Fremont showed 42,407,819 square-feet of total inventory by the end of the third quarter of 2021. The area’s desirability for industrial warehousing and distribution due to its centralized location was highlighted by an availability rate of 6.2 percent and vacancy rate of 3.6 percent, 1.8 percentage points less than the 5.4 percent of the previous quarter. Fremont’s year-to-date net absorption reached 1,013,584 square-feet with 478,042 square-feet of inventory absorbed in the third quarter. The area’s supply of new development continues to grow with 61,098 square-feet under construction.