KM Helps Ink Retail Ground Lease in San Jose

Comparable details:

Address:  2284 Monterey Road, San Jose, CA

Landlord:  RI San Jose, LLC

Tenant:  Taco Bell

SF Leased:  29,798

Pricing:  $3.59 /psf NNN

Type:  Retail – Ground Lease

Term:  180 Months

Tide of E-Commerce Lifts All Industrial

By Paul Bubny

E-commerce is already dominating the conversation when it comes to industrial real estate development. However, a white paper from Prologis makes it clear that we ain’t seen nothin’ yet.

“Forecasters, such as Goldman Sachs, anticipate that online sales will continue to rise at double-digit rates for the foreseeable future,” according to the Prologis report, titled “Inside the Global Supply Chain: E-commerce and a New Demand for Logistics Real Estate.” McKinsey andForrester Research, among others, have estimated that the online share of the retail sector “will rise to the mid-teens during the coming decade, up from less than 10% today,” the report states. “We see several themes emerging that will shape e-commerce and logistics real estate for the foreseeable future.”

One of these themes is organization. “As aggregate e-commerce demand comprises the constituent e-commerce companies, considering decision-making of individual customers provides a roadmap for the future,” according to the Prologis report. “High industry growth suggests to us that distributors will increasingly favor facilities proximate to their end customers.”

We’re also likely to see a wave of industry growth and cannibalization. “High top-line industry growth is a positive, but we also observe that e-commerce customers use the space differently and more intensively; they need more space as traditional retail activities are consolidated into logistics facilities,” the report states. To cite one metric, the report notes that while a brick-and-mortar retailer with $1 billion in annual sales would require about 300,000 to 350,000 square feet of logistics space, the online merchant with similar sales volume needs upwards of one million square feet.

There’s also the specter of obsolescence. “In our view, most e-commerce customers adapt to traditional logistics facilities, rather than require extensive specialized configurations and improvements,” according to Prologis. “On the margin, we see a greater emphasis on high-quality space, including superior infill locations, higher ceiling heights and lower coverage ratios (in Europe and the US)—collectively, themes we also see among our non-e-commerce customers.”

Already, says CBRE Group, demand from both traditional and online retailers is putting a strain on the supply of available class A logistics product. Developers have been aggressive in lining up build-to-suit deals and breaking ground on approximately 45.7 million square feet of speculative development. However, given the 30 million square feet of active e-commerce requirements, and with demand likely to remain strong over the next few years, CBRE doesn’t see supply catching up with demand anytime soon.

Read entire GlobeSt article here.

Google Leases 240,000+ SF in San Francisco

Internet Technology Company Inks Deal at Spear Street Tower

San Jose Warehouse trades for $75/psf

Address: 210 Phelan Ave, , CA

Seller:   Griffoul Living Trust

Buyer:   R&C Brown Associates

RBA SF: 42,000 SF building

Lot size: 1.44 AC (62,726 SF)

Selling price: $3,150,000 ($75.00/SF )

Type:   Industrial-Warehouse


Kidder Mathews represented the Seller in this transaction.

Maryland based ASB Capital Adds 989 Market Street to Portfolio

Address: 989 Market St, San Francisco, CA

Seller:   Harbert Management Corp

Buyer:   ASB Real Estate Investments (ASB Capital Management)

RBA SF: 111,497 SF building

Lot size: 0.38 AC (16,552 SF)

Selling price: $61,250,000 ($549.34/SF )

Type:   Class A Office

989 Market Street is located near the intersection of Market Street and 6th Street in San Francisco’s Mid-Market corridor. Completed in 1908, this historic, six-story office building underwent renovations from 2011 to2013 and is 94 percent occupied. Current tenants include two industry-leading technology companies, Zendesk and Zoosk, and the ground floor retail space is occupied by national retailer Blick Art Supplies.

Kidder Mathews Assists Group in San Jose Warehouse Deal

Comparable details:

Address:  2086 Zanker Road, San Jose, CA

Landlord:  Prologis

Tenant:  Business Resource Group Inc.

SF Leased:  42,805

Pricing:  Call for pricing

Type:  Industrial – Warehouse

Term:  54 Months


Cornerstone RE Advisers Purchases New Montgomery Tower for $148M

Address: 33 New Montgomery St, San Francisco, CA

Seller:   Blackstone Group/Crescent Real Estate Equities (joint venture)

Buyer:   Cornerstone Real Estate Advisers LLC

RBA SF: 240,134 SF building

Lot size: 0.39 AC (16,771 SF)

Selling price: $148,900,000 ($620.07/SF )

Type:   Class A Office

According to Cornerstone’s website, they are located in Hartford, Connecticut and are an indirect subsidiary of the Massachusetts Mutual Life Insurance Company.  The building was 95% occupied at the time of sale to tenants such as Detecon, Progress Investment Management, the Office of the General Counsel, and US Customs.

Kidder Mathews Assists Toyota Tsusho with Fremont Lease

Comparable details:

Address:  41470 Boyce Road, Fremont, CA

Landlord:  Prologis

Tenant:  Toyota Tsusho America Inc.

SF Leased:  64,396

Pricing:  $0.52 /psf NNN

Type:  Industrial – Warehouse

Term:  162 Months

TIAA-CREF Buys Menlo Park Office Building for $50M

Address:   200 Middlefield Road, Menlo Park, CA

Seller:   Menlo Equities

Buyer:   TIAA-CREF

RBA SF: 41,466 SF

Lot size: 2.04 AC (88,862 SF)

Selling price: $50,025,000 ($1206.41/SF)

Type:   Office

This is one of the highest $/SF deals that has occurred, showing that institutional investors are willing to set the high water mark with the amount of competition in the market.  The property was fully renovated in 2013 and was 100% leased at time of sale.

Terreno Acquires Three Building Investment Portfolio

Address:   2054-2070 Burroughs Ave, San Leandro, CA

Seller:   Service West, Inc.

Buyer:   Terreno Realty Corp.

RBA SF: 129,000 SF (Total 3 buildings)

Lot size: 5.98 AC (260,488 SF)

Selling price: $13,300,000 ($103.10/SF)

Type:   Industrial-Warehouse

The properties were 100% leased at the time of sale and had an estimated cap rate of 5.3%.


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