The joint venture between Hines and Oaktree will lead redevelopment of Class A industrial facility; groundbreaking expected in early 2024
(Editor’s Note: According to previous reporting from The Registry, Hines purchased the property, known as the Dixon Landing Research Park, for $47 million, or about $225 per square foot, in 2021. The seller of the property was Walnut Creek-based Vertical Ventures, which had owned the asset since 2019.)
San Francisco – December 1, 2023 – CBRE arranged a construction loan for Milmont Industrial, a 267,000 sq. ft. new construction Class A advanced manufacturing/distribution facility on behalf of global real estate firms, Hines and funds managed by Oaktree Capital Management, L.P. (“Oaktree”). Groundbreaking of the new facility is expected to take place in early 2024.
CBRE’s Brad Zampa, Mike Walker, and Megan Woodring on the Debt and Structured Finance team in San Francisco arranged this loan from an East Coast-based bank. Chip Sutherland and Vincent Machado of CBRE will market the property for lease.
“Advanced manufacturing has grown substantially in Fremont, and Milmont Industrial’s proximity to high-performing tech companies and long-term growth prospects presented a compelling opportunity. We are thrilled with the outcome here. Despite the headwinds in the macro capital markets, we were able to secure an accretive balance sheet bank construction loan,” said Mr. Walker, Executive Vice President at CBRE. “The favorable financing execution is a testament to the top-tier sponsorship and the excellent property location.”
Located at 49000-49090 Milmont Drive in Fremont, Calif., Milmont Industrial is in the Warm Springs District, which is known for its concentration of advanced manufacturing companies in technology, electric vehicles, clean technology, and life sciences industries. Milmont Industrial currently comprises three buildings that will be completely demolished and redeveloped into a single brand-new distribution and advanced manufacturing building with high clear heights, heavy power, ample parking, and loading docks.
“New Class A industrial product of this size is rare in Silicon Valley given the high barriers to entry and lack of developable land,” said Shawn Hardy, Managing Director at Hines. “Milmont Industrial will be a next-generation industrial facility in a strategically located supply-constraint market. We expect high tenant demand given the project’s offering and infill location.”
Fremont’s industrial market is one of the tightest in Silicon Valley, with three of the top five lease transactions taking place in the submarket, according to CBRE Research. Vacancy in the Fremont/Newark industrial was 1.9% in the third quarter this year, down from 2.5% in Q2 2023 and well below the 2.4% market average in Q3 2023.
