INDUSTRIAL MARKET REPORT

Transcription

1 2 nd 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: 56,975,96 1,336, % I-88 Industrial Inventory: I-88 Industrial Availability: I-88 Industrial Availability Rate: 79,486,29 2,441, % Fremont/Newark Industrial Inventory: Fremont/Newark Industrial Availability: Fremont/Newark Industrial Availability Rate: 55,613,739 1,683, % KEY TERMS & DEFINITIONS Availability: Square footage that is marketed for lease which is available within 9 days. This also includes sublease space. 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. This past Quarter we had the largest number of warehouse lease transactions over 2,±SF I have seen in my 25 year memory of this marketplace. Deals from Richmond through Fremont from companies like Amazon, FedEx, UPS, LA Specialty Produce and more made this an incredible quarter. In addition it made our market very tight on Class A warehouse space forcing developers looking under every rock for a site to develop Class A warehouse space. Of the deals just referenced, several of the buildings had barely started construction and the rates all met or exceeded original proforma. The sale market along the 88 Corridor also remains very tight, sale values in some smaller owner user building s are exceeding $2/SF. 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. Lee & s continues to grow in the Bay Area, we are excited to announce our new Walnut Creek office. We are actively looking to hire new and experienced agents in Industrial, Office, Retail and Investment brokerage. 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 216 and beyond! - Craig Hagglund, Managing, Lee & s - Oakland Visit us at Lee & s maintains an up-to-date database of all available properties and sold/leased properties.

2 Lee & s I-88 Corridor - Industrial Market Report QUARTER IN REVIEW 2 nd Quarter 216 NORTH I 88 MARKET STATISTICS 2 nd Quarter 216 MARKET INVENTORY RATE Buildings Total SF Direct SF Sublease SF Available SF Direct Total BERKELEY/EMERYVILLE INDUSTRIAL/WAREHOUSE 417 9,216, , , % 3.24% 77 3,427, , , % 6.16% TOTAL ,643,998 51,21 51,21 4.3% 4.3% OAKLAND INDUSTRIAL 1,234 22,391, , ,783 2.% 2.% MULTI TENANT/INCUBATOR ,246 18,287 18, % 6.28% 116 1,987,53 13,442 13,442.68%.68% WAREHOUSE/DIST 83 6,372,993 3, 3,.%.47% TOTAL 1,475 31,43,68 478,512 3, 58, % 1.64% RICHMOND INDUSTRIAL 285 6,678,94 16,151 7,95 168,56 2.4% 2.52% MULTI TENANT/INCUBATOR 24 1,228,697 85,723 85, % 6.98% ,258 36,552 36, % 4.69% WAREHOUSE/DIST 39 4,61,459 28, 28,.61%.61% TOTAL ,288,354 31,426 7,95 318, % 2.4% MARKET TOTAL 2,338 56,975,96 1,298,959 37,95 1,336, % 2.35% I 88 MARKET STATISTICS 2 nd Quarter 216 MARKET INVENTORY RATE Buildings Total SF Direct SF Sublease SF Available SF Direct Total HAYWARD INDUSTRIAL ,64, ,973 51,9 278, % 1.74% MULTI TENANT/INCUBATOR 164 2,19,92 31,338 31, % 1.43% 76 3,388, ,21 14,34 3, % 8.86% WAREHOUSE/DIST ,583, , , ,655.75% 2.78% TOTAL 1,319 43,228,87 76,743 53,367 1,21, % 2.8% SAN LEANDRO INDUSTRIAL 49 12,591,559 2,216 17, , % 1.73% MULTI TENANT/INCUBATOR ,232 1,937 1, % 1.84% 33 1,379,594 12,128 12,128.88%.88% WAREHOUSE/DIST 94 7,671, ,423 36,681 26, % 3.39% TOTAL ,237, ,74 53,823 5, % 2.25% UNION CITY INDUSTRIAL 17 3,264,85 119, , % 3.65% MULTI TENANT/INCUBATOR ,88 1,728 1,728.41%.41% ,43 3,486 3,486.8%.8% WAREHOUSE/DIST 15 9,91,132 66,851 66, % 6.13% TOTAL ,2, , , % 5.22% MARKET TOTAL 2,132 79,486,29 1,884, ,19 2,441, % 3.7% FREMONT/NEWARK MARKET STATISTICS 2 nd Quarter 216 MARKET INVENTORY RATE Total SF Direct SF Sublease SF Available SF Direct Total FREMONT/NEWARK INDUSTRIAL/WAREHOUSE 31,938, , , , % 2.42% 23,675, 911, , % 3.85% MARKET TOTAL 55,613,739 1,484,64 198,981 1,683, % 3.3% 2

3 Lee & s I-88 Corridor - Industrial Market Report QUARTER IN REVIEW HAYWARD INDUSTRIAL The Hayward market consists of roughly 43 million square feet of warehouse, industrial, multi-tenant and R&D space. This past quarter the Hayward market saw continued strong activity on all fronts. Several notable deals include the 266,±SF warehouse pre-lease of Prologis Hayman Street Distribution Center to LA Specialty Produce (Prologis represented by Jesse Lucas, Craig Hagglund & Drew Fischer of Lee & s), 33,±SF lease to White Cap/HD Supply at 411 West A Street (HD Supply represented by Craig Hagglund of Lee & s), 297,±SF warehouse lease on Hathaway to UPS (DCT is the Landlord), 24,±SF warehouse pre-lease to FedEx on Baumberg Avenue (McShane is the Landlord). We expect the Hayward market to remain very strong with a very limited supply of space into next year. - Craig Hagglund 7, 6, 5, 4, 3, 2, 1, INDUSTRIAL MULTI TENANT/INCUBATOR 2 nd Quarter 216 WAREHOUSE/DIST SAN LEANDRO INDUSTRIAL The San Leandro market encompasses roughly 23 million square feet of warehouse/distribution, industrial, multi-tenant/incubator and flex/r&d space. Market surveys show the overall vacancy hovering around two percent with all four sectors up slightly from the end of last year. Due to a lack of inventory, San Leandro saw only four lease deals north of 35,±SF take place during the quarter, averaging $.58/SF NNN, and just two owner/user sales both to existing Tenants. With a vacancy rate this low, we anticipate both lease rates and sale prices will continue to rise over the next quarter. -Chris Schofield UNION CITY INDUSTRIAL Union City consists of roughly 14 million SF of warehouse, industrial multi-tenant and R&D space. Vacancy rates have increased over the 2 nd Quarter as two large distribution facilities have come onto the market on Dowe Avenue including the East Bay Cold Storage Facility (235,±SF) and Comstock Industrial Center (36,±SF). Notable Leases from the 2 nd Quarter: 155,±SF to Essendant Company 41 Whipple Road 4,±SF to Finelite 35 Whipple Road 3, 25, 2, 15, 1, 5, 8, 7, 6, 5, 4, 3, 2, INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST Notable Sales from the 2 nd Quarter: 1, 117,±SF to UBS Realty 125 Whipple Road 36,±SF to Highridge Provender 334 Dowe Road INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST -Ryan Martens 3

4 Lee & s I-88 Corridor - Industrial Market Report QUARTER IN REVIEW FREMONT/NEWARK INDUSTRIAL The Fremont/Newark market encompasses roughly 55 million square feet of warehouse, industrial, and R&D space. The Fremont/ Newark market has now posted its 12 th straight quarter of positive net absorption. Tenants are finding the leasing landscape to be very competitive, with Landlord s making few concessions and asking rents continuing to rise. We are seeing many institutional owners selling assets at historically high prices per square foot and low cap rates. Buyers obviously believe this current cycle still has legs and that this submarket of Silicon Valley will remain strong in the coming years. Asking rates for Class A warehouse space have now increased to over $.9/SF NNN and to $1.5/SF NNN for Class A R&D space. Notable Leases from the 2 nd Quarter: 354,316±SF to Living Spaces 411 Boyce Road 32,488±SF to Crossmatch Kaiser Drive 28,5±SF to Optoplex 485 Kato Road 1,4, 1,2, 1,, 8, 6, 4, 2, INDUSTRIAL/WAREHOUSE 2 nd Quarter 216 Notable Sales from the 2 nd Quarter: 146,7±SF to West Valley Properties Warm Springs Business Center 177,41±SF to Synnex Corporation 5555 Automall Parkway 117,54±SF to Mass Precision Landing Parkway -Andrew Stoddard & Garrett Drew OAKLAND INDUSTRIAL The Oakland market encompasses roughly 31 million square feet of warehouse, industrial, multi-tenant, and R&D space. The second quarter for the Oakland industrial real estate market has been defined by the high volume of transactions we saw in both leasing and sales activity. In quarters previous, we saw the same increases in rents and sales pricing that we are seeing today but with limited deals due to the extreme lack of available property. Whether it be development based interest, leased investments, owner-user sales, or lease renewals, this quarter had it all. On the lease side we saw Rainin Industries renew their lease in their 23,189±SF building (75 Edgewater Drive) for ten years. The Just Deserts building at th Avenue also leased for ten years to Impossible Foods. We also had a land lease of 2.86± acres (6345 Coliseum Way) to Compass Container in one of the last remaining pieces of industrial dirt in Oakland. In terms of sales, deals of note include the sale of 87,823±SF distribution building (877 San Leandro Street) which recently leased and has now sold to an investor as a leased investment, a 1.86± acre land sale (1 Hegenberger Court) and lastly an owner/ user transaction of 16,545±SF building (8399 Edgewater Drive) situated on 1.6± acres of land. While we do not anticipate the volume of transactions to persist into the third quarter, there is still no question that the Oakland industrial market is thriving and we anticipate values to continue on their same trajectory. - Drew Fischer 5, 45, 4, 35, 3, 25, 2, 15, 1, 5, INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST 4

5 Lee & s I-88 Corridor - Industrial Market Report QUARTER IN REVIEW 2 nd Quarter 216 BERKELEY/EMERYVILLE INDUSTRIAL The Berkeley & Emeryville sub-markets consist of 13 million square feet of warehouse, industrial, multi-tenant and R&D space. Berkeley and Emeryville remain in high demand on all fronts, including hard to find owner user opportunities, desirable infill redevelopment sites, and quality leasable space. Sales of note this quarter include a 6,97±SF mixed use investment property at th Street in Emeryville for $3 MM and a 3,612±SF condo sale at 48 Watts Street in Emeryville for $1.1 MM. Emeryville and Berkeley continue to demand some of the highest sales prices in the East Bay, given limited inventory and desirable central location. Emeryville also has three new leases to report for this quarter including, Bay Cities Pyrotector adding 7,±SF to their footprint at 13 6 th Street at $1.1/SF, US Bionics taking 18,±SF at 4512 Hollis Street for $.72/SF and Nanomix taking a 33,±SF sublease at 5745 Peladeau Street for $.8/SF. 35, 3, 25, 2, 15, 1, 5, INDUSTRIAL/WAREHOUSE We anticipate strong demand and premium pricing to continue in this sub-market. - Ryan Davidson RICHMOND INDUSTRIAL The Richmond market consists of roughly 14 million square feet of warehouse, industrial, multi-tenant, and R&D space. In the 2 nd Quarter of 216 leasing and sales had excellent activity in both sectors. 25, There were approximately seven new leases signed in the Richmond market in the 2 nd Quarter. Five of those leases signed were below 1,±SF. The most notable lease signed was for 224,±SF in Pinole Point by Amazon for a 1 year term. Exciting news for the Richmond market which has attracted some high profile Tenants recently and Amazon adds to that list. Another notable lease signed was on Hensley Street which saw Fox Marble lease 45,±SF. The sales market saw great activity in the 2 nd Quarter as well. There were four sales that took place. Two of those sales were on Regatta in Richmond. The most noteworthy was a 17,±SF warehouse, along the 58 freeway, that Berkeley Bowl purchased. Another major sales transaction occurred at 431 Lakeside Drive. This building was purchases by Making Waves which is a charter school. 2, 15, 1, 5, INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST The Richmond market remains very active and the outlook for 216 is bright. With a lot of vacant land we could see more development in the future providing supply for the historically high demand in Richmond. -Brian Barden 5

6 Lee & s I-88 Corridor - Industrial Market Report QUARTER IN REVIEW NORTH I-88 HISTORY 2 nd Quarter 216 NORTH I-88 HISTORY 6,, 5,5, 5,, 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, , 3, 2, 1, , -2, -3, -4, -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,, 4, 325,784 7,, 6,, 5,, 4,, 3,, 2,, 1,, 7,18,173 6,682,74 6,389,177 6,132,581 6,7,653 6,6,955 5,441,426 5,539,123 5,525,583 5,43,362 4,989,579 4,663,711 4,141,778 3,193,324 3,167,29 2,42,644 1,984,778 1,683, , 2, 12,595 69,879 62,151 23, ,399-2, -4, -6, -114,96-463,86-211, , ,778-1,45-316, , , , -79,637-1,, -916,344 6

7 I-88 Corridor TRANSACTIONS Warehouse - 354,316± SF Leased 411 Boyce Road, Fremont LIVING SPACES Warehouse - 297,5± SF Leased 2229 Hathaway Avenue, Hayward UPS Warehouse - 266,149±SF Leased Hayman Street, Hayward LA SPECIALTY PRODUCE Warehouse - 238,± SF Leased 3596 Baumberg Avenue, Hayward FED EX Industrial - 236,5± SF Leased Fairway Drive, San Leandro SIMMONS Warehouse - 224,154± SF Leased Pinole Point Business Park, Richmond AMAZON Warehouse - 226,9± SF Sold 334 Dowe Avenue, Union City HIGHRIDGE PROVENDER Warehouse - 177,41± SF Sold 5555 Auto Mall Parkway, Fremont SYNNEX CORPORATION Industrial - 146,7± SF Sold Warm Springs Blvd., Fremont VALLEY WEST PROPERTIES Flex/R&D - 117,54± SF Sold Landing Parkway, Fremont MASS PRECISION Industrial - 117,42± SF Sold 125 Whipple Road, Union City UBS REALTY INVESTORS LLC Warehouse - 54,6± SF Sold Western Ave., Union City GOLDBERRY DISTRIBUTORS Go to for complete property listings 7

8 I-88 Corridor LEE AVAILABLES AVAILABLE: ±8.4 Acres 611 Brookside Drive, RICHMOND AVAILABLE: ±7.26 Acres Collins Ave. & John Ave., RICHMOND AVAILABLE: 27,± SF 35 Carlson Boulevard, RICHMOND AVAILABLE: 9,± SF Boscell Road, FREMONT AVAILABLE: ±6.3 Acres 725 & 74 Julie Ann Way, OAKLAND AVAILABLE: 34,± SF 412 Point Eden Way, HAYWARD AVAILABLE: 15,93± SF 2412 American Avenue, HAYWARD AVAILABLE: 16,513± SF 2481 San Leandro Blvd. SAN LEANDRO AVAILABLE: 13,5± SF 291 East 12th Street, OAKLAND AVAILABLE: 13,92± SF 3474 Investment Boulevard, HAYWARD AVAILABLE: 22,451± SF 55 Brandin Court, FREMONT AVAILABLE: 13,75± SF 737 Independent Road, OAKLAND Go to for complete property listings 8

9 52 3 rd Street, Suite 15, Oakland, CA MIKE FURAY Managing Broker mfuray@lee-associates.com BRIAN BARDEN bbarden@lee-associates.com ZACK BARNES zbarnes@lee-associates.com Oakland Office YOUR TEAM RICK BLAND rbland@lee-associates.com NEIL COWPERTHWAITE ncowperthwaite@lee-associates.com RYAN DAVIDSON rdavidson@lee-associates.com GARRETT DREW gdrew@lee-associates.com DREW FISCHER dfischer@lee-associates.com CRAIG HAGGLUND chagglund@lee-associates.com BEN JONES bjones@lee-associates.com JESSE LUCAS jlucas@lee-associates.com RYAN MARTENS rmartens@lee-associates.com DAVE McCARTY dmccarty@lee-associates.com JOE McGLYNN jmcglynn@lee-associates.com DOUG PEARSON dpearson@lee-associates.com CHRIS SCHOFIELD cschofield@lee-associates.com MICHAEL SCHOFIELD mschofield@lee-associates.com WINSTON STREET wstreet@lee-associates.com ANDREW STODDARD astoddard@lee-associates.com GUY WARREN gwarren@lee-associates.com ABOUT LEE & ASSOCIATES Lee & s, 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. 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 & s 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 & s 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