By Jon Peterson
San Francisco-based firms TMG Partners and Farallon Capital Management paid $85 per square foot or $10 million to acquire the 46555 Landing Parkway 118,000 square foot R&D facility in Fremont.
“We think that there are many technology oriented tenants that are looking for space in Fremont. There are several reasons for this. One of the most important is what a move into the market can do for a company’s bottom line. This is the fact that rents in Fremont can be as much as 40 percent to 50 percent less than in some of the markets in Silicon Valley. Another factor is that some of the tenant’s employees already live in the Fremont area so the move will shorten their commute,” said David Cropper, a managing director with TMG.[contextly_sidebar id=”ctsvLCcu5LTbgl7759ltE4AVYYAr3a75″]The property was sold by an undisclosed partnership. The listing agent for both the buyer and seller was the San Jose office of CBRE. The brokers involved were Chip Sutherland, senior vice president, Sherman Chan, senior vice president and Ben Rojas, vice president. The sale of the property was an all-cash transaction.
The property has been vacant since last year. In the past the property had been occupied by companies such as SGI and LAM. The new owners will be putting some additional capital into the property. “At this time we have not come up with a firm budget yet. Some of the planned improvements are a new roof, fixing up the lobby and possibly some landscape work,” said Cropper.
Technology companies are likely to be interested in taking space in the building on Landing Parkway. “I would think that there is a very good chance that the property could be rented to a single user. However, the space is flexible enough that it could be divisible to accommodate more than one tenant,” said Cropper.
TMG has not hired any real estate services companies to oversee the leasing efforts on the property. This is something that the new ownership group will be doing shortly.
TMG believes that the R&D market in Fremont has been going through a transformation. “Vacancy a few years ago in the market were around 20 percent. It’s now somewhere in the range of 12 percent. This has happened with companies either leasing up existing space or users buying properties for their own use,” said Cropper.