By Jon Peterson
Morgan Hill-based Prism Electronics has placed on the market for sale one of its assets in southern Santa Clara County city. The building is an approximately 73,600-square-foot industrial asset located at 18305 Sutter Boulevard, and the asking price is $29.4 million, or roughly $400 per square foot, according to the property’s offering document.
The building owner has chosen the Gilroy office of Colliers to be the listing agent on the sale. Two people that will be working on the transaction are Jeff Barnes, executive vice president, and Mark Sanchez, senior vice president.
Prism is an independent distributor of integrated circuits. Its products include active, passive, memory, electromechanical components, computer products, telecom parts and networking equipment. The company is also the property’s occupant. Its plan is to vacate the building once it sells the property and either move to another location in Morgan Hill or to another city altogether.
Given the property’s current use and layout, as well as market dynamics across this particular submarket, it is likely that the building would be sold to another owner/user entity instead of an investment firm.
The building features two distinct areas; around 49,600 square feet of the property is used for warehouse/manufacturing space, while the other 24,000 square feet has an HVAC drop ceiling office space.
This asset was first developed in 1998. It is zoned for industrial-type uses, so it is likely that the building would not be redeveloped with an alternative use in the future. The property also has a parking ratio of 2.66 spaces per 1,000 square feet, and the total size of the parcel is roughly five acres.
The Morgan Hill industrial warehouse market remains very tight, according to data compiled by Colliers. In its third quarter of 2022 industry overview report, the company states that the market has virtually no vacancies. The total square footage for space in this submarket stands at 1.1 million square feet.
The city of Morgan Hill has seen some recent industrial real estate transactions and developments kick off during this year. Most recently, in early November, Trammell Crow Company and a joint venture partner CBRE Investment Management broke ground on the Cochrane Technology Center, a 500,000-square-foot Class A business park in the city. The development is designed for flexibility to accommodate multiple tenant sizes and the comprehensive operational needs of Silicon Valley companies. Buildings range from 73,000 to 138,000 square feet, according to a statement by the two companies.
In June of 2022, two sizable industrial asset transactions were completed in the city showing the market has a strong interest in the city’s assets. Atlanta-based Invesco spent $119 million, or roughly $290 per square foot, to buy a five-building complex from a joint venture of Trammell Crow Company and partner CBRE Investment Management, accordion to previous reporting by The Registry. That same month a joint venture between Ridge Capital Investors and Westbrook Partners spent $45 million, or $174 per square foot, to buy the 258,122-square-foot industrial asset located at 755 Jarvis Drive. The seller was Bridge Group Investments.