By Jon Peterson
San Francisco-based Swift Real Estate Partners has had such strong leasing action at its Creekside Business Park in Dublin that the real estate investment firm is looking for other investments to make in the Tri-valley market.
“We had strong leasing activity with the property shortly after we bought it. We are big believers in the Tri-valley submarket and the East Bay in general that we are looking for other opportunities to expand our presence.” says Christopher Peatross, president and chief executive officer of Swift.
Swift had acquired the Creekside property late last year for $27.4 million from Blackstone. When it was purchased, the property was 66 percent leased. Taking advantage of market momentum and current tenant relationships, Swift was able to bring the property to 100 percent occupancy within 60 days of owning the asset.
“I think that there were a couple of factors that were working in Swift’s favor after it acquired the property that led to its leasing success. One was Swift was able to be flexible with its plans for the property, which helped to accommodate tenants’ needs. Secondly, and more important, the overall market has strengthened. Vacancy rates in the Dublin office flex market are now sub 10 percent. This has shifted the dynamic where property owners can be more selective with regard to new tenants. Additionally, there is no new development of this kind of product nor is there any in the pipeline,” says Jim Peterson, an executive vice president with JLL in its Walnut Creek office. He is involved with the leasing efforts at the property.
There were two main tenants brought to the property. Zeltiq has a 33,354 square foot lease, and Gigatronics leases 23,873 square feet. Both of the leases are for greater than six years, and the starting rental rates are $1.45 per square foot per month on a triple-net basis.
Creekside Business Park is located at 5875 Arnold Road and 5990-5996 Gleason Drive. The property totals 170,879 square feet.
The performance of the office and office/flex space that Swift owns in the I-680 Corridor shows how tight the market is. The company owns 1.8 million square feet of properties in Pleasanton, Dublin and Concord. Rosewood Commons, Swift’s one million square foot campus located in Pleasanton, near Creekside, recently signed a lease for the final full floor of the project. Swift’s occupancy of its East Bay portfolio is approximately 97 percent. “This isn’t likely to change anytime in the future when no new supply is being added to this region,” said Peatross.