Address: 2975 Volpey Way, Union City, CA
Seller: Citrus Coast Distributors
Buyer: P&R Paper Supply Company
RBA SF: 60,080 total
Lot size: 2.90 AC (126,324 SF)
Selling price: $5,500,000 ($91.54/SF)
The building features seven loading docks with four Kelley Load levelators, heavy power, clear heights of 24 feet, fire sprinklers and skylights. This was an owner/user purchase.
We’ve finally compiled the most recent numbers to end the year. Here’s an excerpt from the report:
The San Francisco Peninsula industrial market continues to tighten as deals of all sizes were completed throughout the
fourth quarter of 2013. Absorption remains positive this year, increasing with larger deals occurring when compared to the previous quarter’s smaller transactions. From the start of the year, total deal velocity increased each quarter, with the largest of deals transacted towards the end of the year.
Vacancy on the Peninsula continues to decrease as demand remains strong, ending the quarter with a 5.9% vacancy rate. The fourth quarter of 2013 marked the fifth consecutive quarter in which vacancy has declined, recording ±290,000 square feet of positive absorption. As a result, rental rates are increasing, averaging $0.86 per square foot, NNN.
By Francys Vallecillo
The U.S. industrial market has been recovering for four years and is poised for a spike in demand, development and delivery, according to Jones Lang LaSalle.
The market has witnessed 15 consecutive quarters of positive net absorption, with last year marking a five-year high with 168 million square feet of net absorption. JLL forecasts this figure could top 180 million square feet in 2014.
“2014 is starting off with high demand from e-commerce and other users who are in the market for large, sophisticated space, and lots of it,” Craig Meyer, president of Industrial Brokerage at JLL, said in the report. “Modern space with proximity to population centers and a robust logistics infrastructure will dominate the industrial real estate sector in 2014.”
The national vacancy rate is forecast to reach a cyclical low of 7.5 percent in 2014.
Here are the four trends driving the market momentum highlighted in JLL’s report:
1. Demand is spreading into secondary markets: Tenant requirements for large, modern warehouse space to accommodate evolved distribution strategies and material handling processes outweighs supply in prime distribution hubs such as Los Angeles, Chicago and New Jersey. As a result, development will spill into markets with land ready for new construction like Phoenix and Indianapolis. Demand is already red hot in traditional distribution corridors, especially the Inland Empire, Dallas and Philadelphia / Harrisburg.
2. Build-to-suits are the new spec: In 2013 half of all U.S. construction began with pre-leases in place. Underwriting criteria for big box space made true speculative construction difficult and many developers sought pre-commitments prior to ground breaking. This means today’s build-to-suits are less about special purpose buildings, or design-build-projects, but are more about kicking off semi-spec buildings.
3. Focus on rail: With the cost of trucking on the rise, developers and investors are focusing on markets with solid intermodal infrastructure in place such as Dallas, Columbus and Memphis. For the seaport markets such as Oakland and Miami there is a push to enhance on- and near-dock rail capabilities; Miami’s new rail system, for example, will give the port access to 74 percent of the U.S. population.
4. Growth driven by ‘clicks’ surpassing ‘bricks’: A staggering 40 percent of big-box industrial requirements are correlated to e-commerce; a sector growing globally by 20 percent each year. As retailers develop new real estate models to support their omni-channel logistics models, they are looking at six primary types of warehouse space, ranging from mega-distribution centers to smaller delivery centers in urban areas. In 2014, we expect to see demand for urban logistics centers to support same-day package delivery.
Article can be seen at World Property Channel here.
A subsidiary of the Hines U.S. Core Office Fund LP closed the sale of 101 Second Street. Financial terms of the deal were not disclosed, but the price has been reported at just under $300 million – the highest dollar amount and price per square foot paid for a single San Francisco office property in over a year.
“Although we’re very proud of the building and the performance we’ve been able to achieve for our investors at 101 Second Street, we have decided that this is a good time to sell the asset,” said Ken Jett, managing director with Hines’ Core Fund, which acquired the building in 2004 for $140.6 million, or $362 per square foot.
The South Financial District has improved significantly over the past 10 years, and “I expect that it will continue to improve for the new owners of the building,” said George Clever, senior managing director in Hines’ West Region.
Invesco Real Estate’s parent, Atlanta-based investment manager Invesco Ltd., had $767.3 billion of assets under management as of Nov. 3.
Address: 311 Turqoise Street, Milpitas, CA
Seller: Stanley Deck
Buyer: Lenthor Engineering
RBA SF: 55,414 total
Lot size: 3.56 Acres (155,073 SF)
Selling price: $4,308,438 ($77.75/SF)
The property was sold to an owner/user. The property had multiple upgrades including TPO Reflective Roof, air products nitrogen pipeline on-site, and multiple equipment pads.
Address: 201 Spear Street, San Francisco, CA
Seller: Cornerstone Real Estate Advisors, Inc.
Buyer: KBS Real Estate Investment Trust III
RBA SF: 246,563 total
Lot size: 0.87 Acres (37,897 SF)
Selling price: $121,000,000 ($490.75/SF)
Type: Class A Office
The property is approximately 80% occupied.
By Francys Vallecillo
More than 70 percent of global investors plan to expand their portfolio within the first six months of 2014, with investor confidence forecasted to reach high marks, according to a new report from Colliers International.
The 522 global investors surveyed for Colliers’ 2014 Global Investor Sentiment Survey demonstrated increased confidence in global markets for 2014, with investor focus expected to shift.
There will be an “increased [investment] volume across all property types as equity investment continues to spread to secondary markets in search of yield and loan capital continues to become more available,” Richard Putnam, managing director, Western Region, Colliers International Capital Markets Group, told WPC News.
The U.S. is the top investment destination among global investors, even as the country’s economy recovers from the recent government shutdown, Colliers reports.
Investors are also expected to target Western Europe, Brazil and gateway Asian cities, Mr. Putnam said. Investors in mature markets like the U.S., Europe and Canada tend to seek returns between five and 10 percent, but in Asia, investors are looking for returns of 20 percent or higher.
Read more of World Property Channel here.
Here’s an excerpt:
The San Francisco Peninsula industrial market in the third quarter of 2013 showed no significant changes from the previous quarter, with the notable exception of a huge decrease in net absorption. Absorption continues to stay positive for the year, but had a significant drop in the third quarter with smaller deals closing more frequently than larger ones. In total, there were fewer deals transacted this quarter than last, but touring activity has been picking up throughout the quarter and continues to show an upward swing.
Read entire report here: industrial-market-research-peninsula-2013-2q
Here’s an excerpt:
Steady rental rates and a large number of users in the market lead to strong activity in the third quarter for the Silicon Valley industrial and warehouse markets. Industrial vacancy dipped below 10%, which should lead to increased rental rates over the short term. New availabilities to the market are quickly being leased, with many tenants struggling to find quality space that fits their needs.
Read entire report: industrial-market-research-silicon-valley-2013-3q