INDUSTRIAL MARKET REPORT

Transcription

1 4 th Qu ar I-88 Corridor te r2 1 6 INDUSTRIAL MARKET REPORT MARKET SNAPSHOT North I-88 Industrial Inventory: North I-88 Industrial Availability: North I-88 Industrial Availability Rate: 57,213,657 1,98, % I-88 Industrial Inventory: I-88 Industrial Availability: I-88 Industrial Availability Rate: 79,451,684 2,198, % Fremont/Newark Industrial Inventory: Fremont/Newark Industrial Availability: Fremont/Newark Industrial Availability Rate: 55,613,739 2,412, % KEY TERMS & DEFINITIONS Availability: Square footage that is marketed for lease which is available within 9 days. This also includes sublease space. 216 ended up being an incredible year for the I-88 corridor industrial market! We saw record high sale prices and lease rates on all product types. Vacancy rates are at historic lows, along with a scarcity of product to buy for both owner users and investors. While we do have new construction projects due for completion later into 217, we anticipate this trend of a tight market to continue well into the year. What will separate the great firms from the rest of the pack is the ability to source product for their clients. Finding the deal not on Industrial buildings are defined as buildings with a ceiling clearance of less than 22 feet with drive in truck doors; some may have dock doors. These buildings can be used by a wide variety of users. Parking is usually limited. This is the most prevalent type of industrial building. Multi-tenant/incubator is defined as an industrial building that divides into units of less than 5,± SF with drive in truck doors and a ceiling clearance of less than 18 feet. These buildings are ideal for expanding small businesses. Warehouse and distribution buildings have a ceiling clearance of 22 feet or greater, dock high doors, limited parking and an adequate apron for truck deliveries. Office/Flex/R&D buildings are characterized by having a parking ratio of at least 3/1 SF of building. They usually have a lower clearance height and can be one or two stories. The parking enables these buildings to be flexible in the type of user they can accommodate. Any user from pure office to research & development can take advantage of the flexibility of this type of building. the market, or the deal about to fall out of escrow. Having a pulse on the street and superior market knowledge is more important than ever in this tight market. At Lee & Associates we pride ourselves on our street smarts, superior market knowledge and our ability to get deals done. We appreciate your business and invite you to contact us with any questions or comments you may have regarding commercial properties in the East Bay. We look forward to working with you in 217 and beyond! - Craig Hagglund, Managing Principal, Lee & Associates - Oakland Visit us at Lee & Associates maintains an up-to-date database of all available properties and sold/leased properties.

2 Lee & Associates I-88 Corridor - Industrial Market Report QUARTER IN REVIEW 4 th Quarter 216 NORTH I 88 MARKET STATISTICS 4 th Quarter 216 MARKET INVENTORY RATE Buildings Total SF Direct SF Sublease SF Available SF Direct Total BERKELEY/EMERYVILLE INDUSTRIAL/WAREHOUSE 421 9,267, , , % 2.69% 78 3,339,12 41,147 41, % 1.23% TOTAL ,66,659 29,76 29, % 2.31% OAKLAND INDUSTRIAL 1,234 22,539,722 33,76 33, % 1.34% MULTI TENANT/INCUBATOR ,246 18,287 18, % 6.28% 115 1,978,76 28,442 28, % 1.44% WAREHOUSE/DIST 82 6,36,48 22,44 22,44.36%.36% TOTAL 1,473 31,116, , , % 1.2% RICHMOND INDUSTRIAL 286 6,881,448 16,743 7,5 168, % 2.44% MULTI TENANT/INCUBATOR 24 1,228,697 84,611 3, 87, % 7.13% ,258 9,386 9, % 1.2% WAREHOUSE/DIST 39 4,61,459 34,45 135,832 17,282.75% 3.7% TOTAL 37 13,49, ,19 146, , % 3.23% MARKET TOTAL 2,342 57,213, , ,332 1,98, % 1.92% I 88 MARKET STATISTICS 4 th Quarter 216 MARKET INVENTORY RATE Buildings Total SF Direct SF Sublease SF Available SF Direct Total HAYWARD INDUSTRIAL ,29,28 64,769 6,25 71,19.4%.44% MULTI TENANT/INCUBATOR 167 2,25,519 19,558 19,558.89%.89% 73 3,326,188 27,29 14,34 284, % 8.55% WAREHOUSE/DIST ,58,98 463, , , % 2.77% TOTAL 1,319 43,141,13 817,96 154, , % 2.26% SAN LEANDRO INDUSTRIAL ,657,346 27,23 5, 275, % 2.17% MULTI TENANT/INCUBATOR ,232 1,273 1,273.21%.21% 33 1,379,594 3,476 3,476.25%.25% WAREHOUSE/DIST 94 7,636,43 219,47 219, % 2.87% TOTAL ,268, ,819 5, 498, % 2.24% UNION CITY INDUSTRIAL 18 3,316,464 63,21 26,944 9, % 2.72% MULTI TENANT/INCUBATOR ,8 5,285 5, % 1.24% ,41 6,552 6, % 1.49% WAREHOUSE/DIST 14 9,862,151 56,997 63,7 624, % 6.33% TOTAL ,42,96 636,35 9, , % 5.18% MARKET TOTAL 2,135 79,451,684 1,947,814 25,66 2,198, % 2.77% FREMONT/NEWARK MARKET STATISTICS 4 th Quarter 216 MARKET INVENTORY RATE Total SF Direct SF Sublease SF Available SF Direct Total FREMONT/NEWARK INDUSTRIAL/WAREHOUSE 31,938, , ,758 1,163,9 3.11% 3.64% 23,675, 1,22,335 46,61 1,248, % 5.28% MARKET TOTAL 55,613,739 2,196, ,359 2,412, % 4.34% 2

3 Lee & Associates I-88 Corridor - Industrial Market Report QUARTER IN REVIEW 4 th Quarter 216 HAYWARD INDUSTRIAL The Hayward market consists of roughly 43 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. The Hayward market remains one of the hottest sub-markets along the I-88 corridor, with a very low vacancy rate. 7, Several of the most notable transactions this past quarter were the sales of Eden Plaza to Black Mountain Properties (131 exchange) for $13.8 million ($135/SF) and ±2.8 acres of industrial land on Depot Road (at Cabot Boulevard) to Everwest Real Estate Partners represented by Craig Hagglund and Ryan Martens of Lee & Associates. Everwest is starting construction on a 5,± square foot Class A freestanding warehouse facility that will be shell complete in roughly the third quarter of , 5, - Craig Hagglund INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST SAN LEANDRO INDUSTRIAL The San Leandro market encompasses roughly 22 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. Market surveys show the overall vacancy hovering around 2.25% with all four sectors down slightly from the end of the 3 rd Quarter. The multi-tenant/incubator market is at a ridiculous.21% vacant. The warehouse/distribution market is the highest with a miniscule 2.87% vacancy rate. The end of the year saw a flurry of activity, with nine new deals over 3,±SF signing in the 4 th Quarter, averaging $.58/SF NNN. Due to a lack of inventory, however, the sale market saw just four total sales two investor sales and two owner/user sales. 35, 25, 15, 5, With a vacancy rate this low, we anticipate both lease rates and sale prices will continue to rise over the next quarter. INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST -Chris Schofield UNION CITY INDUSTRIAL The Union City market consists of roughly 14 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. Vacancy rates dropped slightly to 4.5% over the 4 th Quarter. A few notable sales transactions took place, a 28,±SF industrial building on 7 th Street sold in October for $3.3 million ($123/SF) and a 36,±SF multi-tenant warehouse on Bradford Way closed in December for a little over $4 million ($111/SF). With vacancy rates below 5%, we expect both lease and sale values to continue to rise in Ryan Martens 9, 8, 7, 6, 5, INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST 3

4 Lee & Associates I-88 Corridor - Industrial Market Report QUARTER IN REVIEW FREMONT/NEWARK INDUSTRIAL The Fremont/Newark market encompasses roughly 55 million square feet of warehouse/distribution, industrial, multi-tenant/ incubator and flex/r&d space. The Fremont/Newark market has now posted its 14 th straight quarter of positive net absorption. Much like the year before, 216 will remembered for developers succeeding in preleasing speculative developments, rent and sale prices continuing to climb and a continued scarcity of available industrial space. Looking into 217, we anticipate tenants either agreeing to renew at much higher rates, or forced to relocate out of the market to save 2%-3% (north to Hayward or east to Livermore). Following the greater trend of 216, the 4 th Quarter closed out with considerably few building sales. We will continue to encourage owners who are considering selling, to do so in 217. There remains strong pent-up demand on the buyer side from owner/ users and investors. 1, 1, 1,, 8, 6, INDUSTRIAL/WAREHOUSE 4 th Quarter 216 Notable Leases from the 4 th Quarter: 55,614±SF to Inside Source 755 Central Ave., Newark 75,378±SF to Think Surgical Inc Lakeview Boulevard, Fremont 61,1±SF to Compass Group USA Hannover Place, Fremont Notable Sales from the 4 th Quarter: 36,4±SF to Sharp Dimension 424 Business Center Drive, Fremont 43,199±SF to Winward Silks Albrae Street, Fremont -Andrew Stoddard & Garrett Drew OAKLAND INDUSTRIAL The Oakland market encompasses roughly 31 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. The 4 th Quarter in the Oakland industrial market was very similar to the 3 rd Quarter in terms of quantity of mid-sized building transactions. While the brokers who cover this area of the market would characterize it as thin in terms of available product, there is a good amount of deals that have occurred in the last two quarters. We have seen a flood of buildings come on the market aimed specifically at the cannabis market, for both lease and sale. This continues to be the major driving force for the Oakland industrial world. 5, 45, 35, 25, 15, Notable Leases in 4 th Quarter: 5, 15,±SF on ±3.3 acres to Sunstate Equipment, Co. 81 Oakport Street 75,217±SF to Thomas Espinosa 219 Frederick Street 48,12±SF to Matheson Flight Extenders, Inc. 724 Edgewater Drive INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST Notable Sales in 4 th Quarter: 75,9±SF to Amelia Oakland, LLC Amelia Street 214,154±SF to Adam Goldberg 196 Mandela Parkway 18,938±SF to 29 Hegenberger LLC 29 Hegenberger Road - Drew Fischer 4

5 Lee & Associates I-88 Corridor - Industrial Market Report QUARTER IN REVIEW 4 th Quarter 216 BERKELEY/EMERYVILLE INDUSTRIAL The Berkeley & Emeryville sub-markets consist of 12 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. The Berkeley and Emeryville markets continued to command some of the highest sale and rent figures in the East Bay throughout the last quarter of 216. Inventory continues to remain limited, with demand at an all-time high for all product types including industrial, office, land and residential redevelopment sites. 35, 25, 15, Sales of note this quarter include developer Rawson Blum & Leon s acquisition of 3637 Adeline Street on the Emeryville/Oakland border. This $1.45 million sale achieved $115/SF on the 12,56± square foot parcel or $24/SF on the 6,± square foot building. 5, INDUSTRIAL/WAREHOUSE On the leasing side, in Emeryville, Symbio Robotics took 6,55± square feet of manufacturing space at 1368 Park Avenue with a starting rent of $1.45/SF IG. In Berkeley, the redevelopment of The Pyramid Brewing Facility on Gilman saw its first lease in the project, with Blue Bottle Coffee taking 7,5± square feet with a starting rent of $1.25/SF NNN. We anticipate strong demand and premium pricing to continue in this sub-market. - Ryan Davidson RICHMOND INDUSTRIAL The Richmond market consists of roughly 13 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. In the 4 th Quarter of 216 leasing continued its steady pace, while sales went to another level of hot! 25, There were two new leases signed in the Richmond market in the 4 th Quarter. Both leases were signed for approximately 2,± square feet each, with one located on West Ohio Avenue and the other on Marina Bay Parkway. The leasing market has remained steady; vacancy is still low and prices have risen. The sales market was on fire in the 4 th Quarter of 216. There were six sales of significance, the largest sale occurred at 35 Carlson Boulevard which was 128,± square feet to an investor. The other notable sales included an 11,± square foot building at 115 Chesley Avenue to SJ Foods and a sale on Lakeside Drive where the STG Group sold a two building flex/r&d property to Making Waves, a charter school. 15, 5, INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST The Richmond market remains very active and the outlook for Richmond continues to soar for Brian Barden 5

6 Lee & Associates I-88 Corridor - Industrial Market Report QUARTER IN REVIEW NORTH I-88 HISTORY 4 th Quarter 216 NORTH I-88 HISTORY 6,, 5,5, 5,, 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, , -6, -7, I-88 HISTORY I-88 HISTORY 1,, 9,, 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, , 5, 25, , -5, -75, -1,, -1,25, -1,5, -1,75, -2,, FREMONT/NEWARK HISTORY FREMONT/NEWARK HISTORY 8,, 325,784 7,, 6,, 5,, 4,, 3,, 2,, 5,441,426 6,7,653 6,682,74 6,389,177 6,132,581 5,539,123 4,989,579 7,18,173 6,6,955 5,525,583 5,43,362 4,663,711 4,141,778 3,193,324 3,167,29 2,42,644 1,984,778 1,683,585 2,412,836 2,229, ,96 12,595 69, , 62, , ,866 23, , ,778-1,45-316, , ,26-122, , ,86 1,, -6, , -79,637-1,, -916,344 6

7 I-88 Corridor TRANSACTIONS Industrial - 136,442± SF Leased Williams Street, San Leandro ANCHOR DISTRIBUTING, INC. Flex - 1,13± SF Leased 65 Paseo Padre Parkway, Fremont JOHNSON & JOHNSON SERVICES Industrial - 79,842±SF Leased 1251 Doolittle Drive, San Leandro RELIABLE LIQUIDATION & INSTALLATION Flex - 75,378± SF Leased 4721 Lakeview Boulevard, Fremont THINK SURGICAL INC. Industrial - 75,217± SF Leased 219 Frederick Street, Oakland THOMAS ESPINOZA Flex - 74,674± SF Leased Lakeview Boulevard, Fremont SEAGATE TECHNOLOGY Industrial - 45,± SF Sold 255 S. 7th Street, San Jose THE BLACKSTONE GROUP Industrial - 214,154± SF Sold 196 Mandela Parkway, Oakland ADAM GOLDBERG Industrial - 132,994± SF Sold 2756 Alvarado Street, San Leandro INDUSTRIAL PROPERTY TRUST Industrial - 128,± SF Sold 35 Carlson Boulevard, Richmond ADEL PARK LLC Land - 121,532± SF Sold 3781 Depot Road, Hayward EVERWEST Industrial - 11,± SF Sold 115 Chesley Avenue, Richmond SJ FOODS Go to for complete property listings 7

8 I-88 Corridor LEE AVAILABLES /SALE AVAILABLE: ±17.82 Acres Wilbur Ave., ANTIOCH AVAILABLE: 5,23±SF 3781 Depot Rd., HAYWARD FOR SALE AVAILABLE: 44,28± SF 1833 Stearman Ave., HAYWARD AVAILABLE: 34,± SF 412 Point Eden Way, HAYWRD AVAILABLE: 32,874± SF Marina Way, RICHMOND AVAILABLE: 47,73± SF 4149 Boyce Rd., FREMONT FOR SALE AVAILABLE: 26,772± SF 2438 Radley Court, HAYWARD FOR SUBLEASE AVAILABLE: 26,453± SF 235 Zanker Rd., SAN JOSE AVAILABLE: 15,626± SF 495 Encyclopedia Cir., FREMONT AVAILABLE: 15,± SF 21 Second St., OAKLAND FOR SALE AVAILABLE: 29,634± SF 115 Shary Cir., CONCORD AVAILABLE: 15,± SF 535 Brandin Ct., FREMONT Go to for complete property listings 8

9 52 3 rd Street, Suite 15, Oakland, CA Oakland Office YOUR TEAM INDUSTRIAL AGENTS NAME TITLE PHONE NUMBER ADDRESS Brian Barden Associate bbarden@lee-associates.com Zack Barnes Associate zbarnes@lee-associates.com Ryan Davidson Principal rdavidson@lee-associates.com Garrett Drew Associate gdrew@lee-associates.com Drew Fischer Principal Craig Hagglund Principal chagglund@lee-associates.com Jesse Lucas Principal jlucas@lee-associates.com Ryan Martens Principal rmartens@lee-associates.com Doug Pearson Principal dpearson@lee-associates.com Chris Schofield Principal cschofield@lee-associates.com Michael Schofield Principal mschofield@lee-associates.com Andrew Stoddard Principal astoddard@lee-associates.com INVESTMENT AGENTS NAME TITLE PHONE NUMBER ADDRESS Rick Bland Principal rbland@lee-associates.com Winston Street Associate wstreet@lee-associates.com Guy Warren Principal gwarren@lee-associates.com OFFICE AGENTS NAME TITLE PHONE NUMBER ADDRESS Neil Cowperthwaite Associate ncowperthwaite@lee-associates.com Ben Jones Principal bjones@lee-associates.com Dave McCarty Principal dmccarty@lee-associates.com Joseph McGlynn Associate jmcglynn@lee-associates.com RETAIL AGENT NAME TITLE PHONE NUMBER ADDRESS Cass Gulden Associate cgulden@lee-associates.com MANAGING PRINCIPAL NAME TITLE PHONE NUMBER ADDRESS Mike Furay Managing Principal mfuray@lee-associates.com ABOUT LEE & ASSOCIATES Lee & Associates, founded in 1979, is one of the largest regional commercial real estate providers in the United States. Since 1979, our seasoned, motivated shareholders and professionals have been offering comprehensive quality service nationally and locally in a pro-active manner. We develop customized solutions for all of your real estates needs through our market-to-market knowledge in all property types. Our unique business model and extensive experience has helped us become one of the largest commercial real estate providers in the United States. Stay Connected: 9

10 LOCAL EXPERTISE. INTERNATIONAL REACH. WORLD CLASS. CANADA WEST AFFILIATE INTERNATIONAL RELATIONSHIP Austria Netherlands Belgium Poland France Slovakia Ireland Spain Luxembourg Turkey EAST MIDWEST SOUTH SOUTHWEST INTERNATIONAL ORGANIZATION, LOCAL OWNERSHIP Established in 1979, Lee & Associates has expanded across the nation and North America with offices that are individually owned by the shareholders of that office, thus encouraging an entrepreneurial spirit and allowing more freedom and creativity to make real estate transactions work. EXPLOSIVE GROWTH Since its inception there has been an explosive growth of Lee & Associates offices throughout the country and now in Vancouver, British Columbia, making it one of the largest and fastest growing commercial real estate organizations in North America Pasadena, CA Vancouver, B.C Eastern Pennsylvania Columbus, OH Houston, TX Denver, CO Cleveland, OH Long Island-Queens, NY Chesapeake Region, MD Valuation, Atlanta, GA Edison, NJ Orlando, FL Charleston, SC Fort Myers, FL Manhattan, NY Greenville, SC 21 - Atlanta, GA 21 - Greenwood, IN 21 - Indianapolis, IN 29 - Long Beach, CA 29 - Elmwood Park, NJ 28 - Boise, ID 28 - ISG, LA, CA 28 - Palm Desert, CA 28 - Santa Barbara, CA 26 - Antelope Valley, CA 26 - Dallas, TX 26 - Madison, WI 26 - Oakland, CA 26 - Reno, NV 26 - San Diego - UTC, CA 26 - Ventura, CA 26 - San Luis Obispo, CA 25 - Southfield, MI 25 - Los Olivos, CA 24 - Calabasas, CA 24 - St. Louis, MO 22 - Chicago, IL 21 - Victorville, CA Temecula Valley, CA Central LA, CA Sherman Oaks, CA West LA, CA Pleasanton, CA Stockton, CA Phoenix, AZ Carlsbad, CA Industry, CA LA - Long Beach, CA Riverside, CA Ontario, CA Newport Beach, CA Orange, CA Irvine, CA