Prologis Adds to Bay Area Portfolio With Redevelopment in Fremont

Prologis, San Francisco, Bay Area, commercial real estate news, Fremont, Tracy, CBRE, Oakland, East Bay, Momentive Specialty Chemicals

By Jon Peterson

San Francisco-based Prologis continues to expand its industrial development footprint in the San Francisco Bay Area. The publicly traded REIT has acquired a 33.06-acre re-development site in Fremont for close to $14 per square foot or around $8.7 million, according to sources familiar with the sale.

[contextly_sidebar id=”m8I3pXmEC4EArUYh0I4YSvI7Mk7FE059″]This project comes on the heels of Prologis breaking ground earlier this month on its 1,200-acre development in Tracy called Prologis International Park of Commerce.

Prologis declined to comment when contacted for this story. It has a policy for the most part of not talking about specific real estate transactions.

The land in Fremont was previously owned by Momentive Specialty Chemicals. This company was represented in the transaction by the Oakland office of CBRE. The brokers involved were Doug Norton, senior vice president and Michael Walker, vice president. Norton declined to comment on the sales price of the property. This real estate services company will be involved in leasing the new space on behalf of Prologis once it comes on line.

“The 90,000 square foot existing property had been shut down by the seller in 2012. The site was then cleared at a later date,” said Norton. The property is located at 41100 Boyce Road in Fremont.

Prologis is planning to redevelop the site into two separate buildings. “They will be starting soon on a new spec development. The project will be split into two buildings. One will be a 354,540 square foot warehouse. The other will be a warehouse totaling 269,380 square foot with 36 foot clear height. I envision that while the project does have a design that allows for multiple tenants, there could be a total of one to two tenants in the property,” said Norton. The development should be all done by the fourth quarter of next year.

He believes that there will be many types of tenants that will be considering leasing space in the project. “I would think that the targeting audience would include regular distribution tenants, e-commerce and technology manufacturing firms. These kinds of businesses will likely be ½ mile from I-880, having excellent access to the 880 and 680 freeways and be only 30 miles from the Port of Oakland,” said Norton.

The overall warehouse industrial market in the East Bay remains very tight. “The current vacancy is around 2 percent and there remains limited land left for new development opportunities. Rents in the marketplace are up 15 percent on a year-to-year basis, “ said Norton.

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