By Jon Peterson
Walnut Creek-based Nearon Enterprises and its joint venture partner Woodstock have put on the market for sale the 322,318 square foot Crossroads Research Center in Union City. The pricing guidance on the planned sale is $150 million, or $465 per square foot, according to sources familiar with the property.
The sellers have selected JLL Americas to be the listing agent on the trade. Those working on the sale include Will Connors and Rob Hielscher, both senior managing directors at the firm. JLL declined to comment when contacted for this sale.
The asset has a total of four buildings, which are located at 3180-3200, 3240, 3242 and 3280 Whipple Road. The property has a current occupancy of 72 percent with an average remaining lease term of 2.8 years as of October of this year.
The life science tenant in the property is Zoetis, a large manufacturer of medicine for pets and livestock. The tenant has two different leases in the property. This includes 91,124 square feet at 3240 Whipple Road and 32,015 square feet at 3280 A Whipple Road. Both of these leases expire in March 2026 and have rents that are below market rates.
There are two other major tenants in the property with much shorter leases than Zoetis. One is with Ariat International for 65,960 square feet in 3242 Whipple Road that lasts until February 2023. The other is 44,199 square feet with Smart Wires at 3280 Whipple Road. This lease expires at the end of 2021. These leases would give the new owner a clear path to have the property 100 percent converted to a life science product after a three-year hold.
The property as it stands today has 62 percent of the space allocated for office/R&D and another 38 percent for life science. The property was first developed in 2000 and 2001, and the four buildings are all single-story facilities. The land area for the project is 23.14 acres. The buildings feature on-site parking, which is comprised of a total of 1,120 parking spaces, or 3.46 spaces per 1,000 square feet.
The market demographics for the life science property type in the San Francisco Bay Area remain very strong. Through the second quarter of this year, there are active requirements for over 4 million square feet of space in a market with sub-five percent vacancy and a majority pre-leased development pipeline, according to sources tracking this information. With rents currently in the low $4 per square foot triple-net, the ability to access scale and suitable infrastructure has made the central I-880 a highly attractive option for life science tenants.