JUNCTION INVESTMENT SUMMARY SINGLE TENANT LONG TERM NNN LEASED INVESTMENT OPPORTUNITY IN SILICON VALLEY

Transcription

1 2581 JUNCTION s a n j o s e, C A INVESTMENT SUMMARY SINGLE TENANT LONG TERM NNN LEASED INVESTMENT OPPORTUNITY IN SILICON VALLEY

2 THE OFFERING CBRE, as exclusive advisor, is pleased to present the outstanding opportunity to acquire the fee simple interest in 2581 Junction Avenue (the Property ), in San Jose, California. The Property consists of an office/ R&D/manufacturing building totaling 92,864 square feet on a acre parcel. The Property is 100% leased to Thin Film Electronics, who executed a 12-year lease in 2016, leaving 10 years of remaining term on the lease. The Property offers an excellent North San Jose location, as well as cleanroom facilities that are essential to the tenant s business. The offering is being made un-priced and on an as-is, where-is basis. Address 2581 Junction Avenue San Jose, CA Year Built 1983 Renovations 2006/2016 Total Rentable Area Floors Land Area % Leased 100% Parking Ratio Tenant Lease Expiration 92,864 Square Feet Partial Two-Story Acres 3.3/1000 (306 spaces) Thin Film Electronics (100% of the NRA) Sept-2028 INVESTMENT HIGHLIGHTS TENANCY 100% NNN leased to Thin Film Electronics with ten years of remaining term. Thin Film Electronics is a leading printed electronics technology company based in Norway, with their U.S. headquarters located at the Property. Thin Film Electronics is traded publicly in Norway and traded on the OTC in the United States. Recent Property Updates In 2016, the Property underwent significant upgrades and renovations totaling over $5.5 million ($60 per square foot). Interior renovations included Title 24 lighting, restroom renovations, fitness center, large break room and office upgrades. Exterior capital expenditures included, a new roof, installation of vehicle charging stations, parking lot upgrades, exterior building paint, updated landscaping, and a new outdoor seating area JUNCTION 2 MISSION CRITICAL PRODUCTION FACILITY The building contains approximately 22,200 square feet of cleanroom space and supporting infrastructure. The cleanrooms operate in Classes ranging from 1,000 to 10,000. ThinFilm has made a substantial investment to upgrade the components and equipment for production, making the property a mission critical facility for them. The cost for Class 1,000 cleanrooms ranges from $400 to $800 per square foot, in addition to the time needed to certify these specialized spaces. DESIRABLE LOCATION Excellent North San Jose location just north of the corner of Junction Avenue and Trimble Road, offering excellent access to the Silicon Valley s most traveled highways. In addition, the San Jose International Airport is an 8 minute drive from the Property.

3 3 Transforming Location North San Jose has witnessed a transformation over the past several years with the construction of new residential, retail and mixed-use projects. These developments have created a true live, work, play environment. Dynamic Market Fundamentals North San Jose continues to attract tenants from a wide variety of industries, with a majority of the demand coming from the technology sector. This has resulted in significant occupancy gains since 2013 and has led to increases in average asking lease rates. Proximity to Transit The Property is less than half a mile to the VTA Light Rail Bonaventura station. The station will offer direct access to the Milpitas BART Station, which is scheduled to open at the end of this year, representing the first connection for VTA Light Rail to BART. EXECUTIVE SUMMARY SANTA CLARA SAN JOSE INTERNATIONAL AIRPORT TRIMBLE RD ORCHARD PKWY 2581 JUNCTION s a n j o s e, C A PLUMERIA DR ZANKER RD N 1ST ST JUNCTION AVE MONTAGUE EXPWY

4 EXCELLENT NORTH SAN JOSE LOCATION SURROUNDED BY HOUSING AND AMENITIES CENTRALIZED LOCATION North San Jose is one of the few submarkets in Silicon Valley effectively served by all four major north/south freeways connecting to both sides of the San Francisco Bay. The Property is located just over a mile from Highway 237, a major Silicon Valley thoroughfare. In addition, Highway 101 and Interstate 880 are easily accessible via Trimble Road. NEARBY TRANSIT OPTIONS The Bonaventura VTA Light Rail Station is less than one half mile from the Property, which will provide a direct connection to the soon-to-be completed Milpitas BART station that is scheduled to open at the end of the year. Additionally, the San Jose International Airport is less than three miles from the Property JUNCTION NUMEROUS NEARBY AMENITIES The Property is in close proximity to several retail centers and amenities. The Marketplace retail center is located less than one mile from the Property on Trimble Road and consists of several restaurants and a 140- room Homewood Suites by Hilton. Approximately two miles from the Property is Rivermark Plaza, a 200,000-square foot Safeway anchored retail center that includes several retail stores and restaurants and a 150- room Hyatt Place hotel. Just over two miles from the Property is First retail center, which provides a rich mix of amenities including a Target, CVS Pharmacy, Fresh and Easy, numerous dining options and two hotels. Additional planned retail centers in the immediate area include a recently approved project at the corner of Orchard Parkway and Trimble Road and Santa Clara City Center, located near Levi s Stadium, a major mixed-use development encompassing 239 acres. RESIDENTIAL DEVELOPMENTS North San Jose and Milpitas have seen significant residential development over the past several years. Over 12,000 new units have been completed, with an additional 1,300 units currently under construction. This provides employers and employees with several nearby options for housing, furthering the live, work, play environment in North San Jose. 4

5 5 INVESTMENT SUMMARY 2581 JUNCTION s a n j o s e, C A

6 DYNAMIC MARKET FUNDAMENTALS The North San Jose R&D market has witnessed over 1.2 million square feet of occupancy gains since the beginning of 2014, which has resulted in a 39% increase in average asking lease rates over the same time period. The recent uptick in vacancy can be attributed to a couple of factors; 40% of the vacant space in the market can be attributed to four projects that have recently undergone or are undergoing renovations (The Assembly, Corporate Technology Park, Champion Point and Valley Research Center). These projects combined represent over 1.5 million square feet of vacancy. In addition to these large projects, another 20% of the vacancy is comprised of spaces and buildings less than 50,000 square feet, which do not compete with 2581 Junction. Further differentiating 2581 Junction are its existing cleanroom, which are costly, difficult to replicate and are in limited supply throughout Silicon Valley. Number Of Leases LEASES SIGNED OVER 50,000 SF SINCE SIGNIFICANT TENANT MIGRATION Since the beginning of 2016, North Jose has been a leader in Silicon Valley for attracting large corporate users. The submarket has had 30 lease transactions of 50,000 square feet or larger completed since 2016: only second to Santa Clara for large leases signed in Silicon Valley over this time period. This demonstrates that North San Jose is a top 0 Santa Clara North San Jose Fremont Sunnyvale Milpitas Mt. View/Los Altos South San Jose Newark West Valley Downtown San Jose choice for companies seeking space in Silicon Valley. In addition to large leases, several large technology companies recently purchased buildings or land in the submarket, resulting in an additional one million square feet of occupancy gains JUNCTION HOME TO MAJOR TECHNOLOGY COMPANIES In-migration of major technology companies continues to transform North San Jose. Apple and Google have gained control of over 1.6 million square feet in the submarket. In addition, Apple and Microsoft have purchased over 130 acres of land slated for future development, which is anticipated to add over five million square feet of buildings. Additional large corporate users include Samsung, which opened its new headquarters on North 1st Street, totaling 680,000 square feet, and Broadcom, which acquired the project Innovation Place totaling 438,400 square feet with land for future expansion. 6

7 7 INVESTMENT SUMMARY

8 2581 JUNCTION s a n j o s e, C A A LISTING FROM CBRE CAPITAL MARKETS OFFICE WEST, LED BY: INVESTMENT SUMMARY CAPITAL MARKETS OFFICE WESTERN U.S. BAY AREA Russell Ingrum Joe Moriarty Scott J. Prosser Jack DePuy DENVER Tim Richey Mike Winn Chad Flynn Jenny Knowlton INVESTMENT CONTACTS JOE MORIARTY Executive Vice President joseph.moriarty@cbre.com Lic RUSSELL INGRUM Vice Chairman russell.ingrum@cbre.com Lic SCOTT J. PROSSER Executive Vice President scott.prosser@cbre.com Lic DEBT & STRUCTURED FINANCE BRAD ZAMPA Executive Vice President brad.zampa@cbre.com Lic JACK DEPUY Vice President jack.depuy@cbre.com Lic MICHAEL WALKER Senior Vice President michael.l.walker@cbre.com Lic SEATTLE Tom Pehl PHOENIX Barry Gabel PORTLAND Trevor Kafoury Charles Safley SAN DIEGO Louay Alsadek Hunter Rowe LOS ANGELES Todd Tydlaska Sean Sullivan Mike Longo ORANGE COUNTY Anthony DeLorenzo DEBT & STRUCTURED FINANCE Brad Zampa Michael Walker Brady O Donnell Bruce Francis Mark McGovern Val Achtemeier Nick Santangelo 2018 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.