In a transaction that closed late last year, one of the world’s largest owners, operators and developers of industrial real estate, Prologis, made an acquisition of a 9-building, nearly 500,000 square foot complex in Milpitas for $84.5 million, or roughly $170 per square foot, according to public records.
The property was sold by San Diego-based Westcore Properties, which has owned the asset since 2007. The collection of nine buildings is a mixture of manufacturing and light industrial space. The asset is located at 637, 677 and 727 Gibraltar Court and 777, 847, 927, 1077 and 1177 Gibraltar Drive.[contextly_sidebar id=”XvSgSyDJqrnxsruwdb7qCuoqx3LMC9FE”]The Registry reported in January of 2015 that the owner was in the process of selling the buildings, however, it was stated that the closing would likely be a few months away. “One of our goals with the property was to get it re-leased, and we were able to do that. We think now is a good time to sell the asset since we have accomplished that,” said Don Ankeny, president of Westcore Properties at the time. Westcore signed Flextronics International USA, the international supply chain solutions company, for a new 10-year lease on the property in July of 2014. A year ago, sources familiar with the property valued it at around $85 million.
Cushman & Wakefield represented both parties in the transaction. Executive Managing Director Eric Fox, Executive Managing Director Steve Hermann and Executive Managing Director Bob Gilley worked on the deal.
Gibraltar Drive has seen several of its properties trade hands in the last 12 months. 542 Gibraltar Drive, which is a 54,000 square foot, two building complex just next to the nine buildings Prologis acquired, traded in June of last year for $13.6 million, or $251 per square foot. Across the street, a 4-building complex with an address at 1001 S. Milpitas Blvd. sold in February of last year for $45.25 million.
According to a recent, 4th quarter 2015 Colliers International Silicon Valley Research & Forecast Report, of the nine cities in the report (Campbell, Sunnyvale, Santa Clara, San Jose, Milpitas, Fremont and Morgan Hill), Milpitas had the highest industrial availability rate of 8.9 percent. Asking rents for R&D facilities averaged at $1.55, industrial at $0.95 and warehouse at $0.72. These were lower in some cases than the average rates in Silicon Valley, which were at $1.73, $1.12 and $0.69 for R&D, industrial and warehouse, respectively, according to the report.