By Jon Peterson
Palo Alto-based Tesla has signed a major lease in Fremont in close proximity to its manufacturing facility, the former NUMMI plant. The electric automobile company will take 302,564 square feet of office/R&D space located at 47400 Kato Road, according to multiple sources familiar with the transaction.[contextly_sidebar id=”F18Sw1Wa95zSPC3drC6t45OgZFUFbdfH”]The space that Tesla is taking is owned by San Diego-based Westcore Properties. Both the real estate investor and the tenant declined to comment on this lease when contacted for this story. Greg Matter, a senior vice president for JLL and who represents Tesla for its space needs also did not respond to multiple phone calls.
Westcore had been working with the Oakland office of Colliers International on the leasing of the property in Fremont. The lead person on this was Kevin Hatcher, senior vice president. He declined to comment on the name of the tenant for the Fremont property.
Based on the sources that provided the information, the lease is estimated to be for 15 years. The new space will be a major expansion for Tesla. The office component of the property will total around 160,000 square feet, which is estimated to be a home to a range of 800 to 1,000 employees. Some of the employees will be moving from its location in Palo Alto.
The project in Fremont is a redevelopment for Westcore. “We acquired this property in 2012. We had been looking at this project either as a single- or multi-tenant operation in the future. There are a couple of old buildings that will be demolished to make way for the new space. The new space should be ready to go by the third quarter of 2015,” says Victoria Grether, vice president of acquisitions and asset manager for Westcore. She works out of the company’s Northern California office in San Francisco.
The deal with Tesla shows the market is attracting demand from new tenants. “I think that leasing activity before construction is finished shows how things in a market like Fremont have changed over the past couple of years. Around 18 months ago, the market in Fremont was pretty sleepy. This market has definitely changed now. The developers that have taken the construction risk have made it pay off for them,” says Scott Borgia, a senior vice president with DTZ in San Jose.