By Meghan Hall
Logistics real estate giant Prologis has scooped up seven acres of industrial property in San Jose as the asset class continues to see increasing demand from buyers. In a deal that just recently closed about two weeks ago, Prologis acquired three parcels on Old Bayshore Highway for $22.8 million. At the time of the sale, plans were already on file with the City of San Jose to redevelop a portion of the property.
The assets are located at 1336, 1390 and 1420 Old Bayshore Highway. Prologis purchased the property through an affiliate—called Exchange 1336 Old Bay Shore—according to The Mercury News, who was the first to report the deal.
The properties are located along a commercial corridor and just off of Interstate 880 and Highway 101. San Jose International Airport is within a few minutes’ drive, as is downtown Santa Clara and downtown San Jose. Nearby businesses include FJCM Truck & Trailer Center, Intex Auto Parts and FleetPride.
Plans on file with the City of San Jose indicate that 1420 Old Bay Shore Highway could soon be redeveloped. Plans would demolish an existing office and manufacturing building—which currently totals just over 19,000 square feet— and result in the construction of a 69,192 square foot warehouse. In all, 1420 Old Bayshore totals about 3.8 acres. A permit for the development was granted to the property owner—listed as Ernest M. Nakaji—at the end of August. The project has been dubbed the “Old Bayshore Highway Warehouse Project.”
As part of its overall business strategy, Prologis has been actively targeting and developing properties in core, high barrier to entry markets, such as the San Francisco Bay Area. In a recent interview with The Registry, Prologis stated that build-out logistics networks with urban fulfillment centers can significantly increase both emissions and delivery times for customers, and as such has become a top priority.
“Prologis as a company is focused on making sure customers have this logistics real estate…It’s a challenge because these are some of the most difficult environments in which to create–especially to construct—new logistics real estate,” stated Prologis’ Head or Research Melinda McLaughlin. But it has a huge payoff not just for the consumers but for the environment.”
Prologis is one of the largest owners and operators of logistics real estate globally. According to its website, $2.2 trillion in goods pass through its distribution centers each year, accounting for 2.5 percent of the world’s GDP. As of December 2020, the company owned or had investments in 984 million square feet of space in 19 countries, and Prologis leases its spaces to more than 5,500 businesses. Over the last year, the company also produced $1.47 billion in profits and generated $4.44 billion in revenue.