Fremont tech and industrial park sold to big real estate firm

Deal suggests rising property values in the area

FREMONT — A large Texas real estate company has purchased a Fremont tech and industrial park for $40.4 million in cash, indicating rising property values for the site in the midst of a difficult post-coronavirus economic landscape.

According to documents filed with the Alameda County Recorder’s Office on Oct. 11, Hines U.S. Property Partners, acting through an affiliate, purchased the two-building complex at 48603 and 48633 Warm Springs Road in Fremont. Current tenants include an electronics manufacturer, an energy company, and a manufacturer of optical products.

A massive Tesla electric vehicle factory is a few miles away, and the area is densely packed with tech and advanced manufacturing firms.

Houston-based Hines is one of the country’s largest and most successful development and investment firms, and its transactions and projects are sometimes regarded as barometers of the commercial real estate market’s current state.

Hines stated that it was drawn to Fremont’s Warm Springs district, which the city has been attempting to revitalize with new economic activity.

“Warm Springs is an extremely appealing opportunity due to the confluence of scarce supply and historically low vacancy rates in a large and flourishing sub-market,” explained Sam Cheikh, managing director at Hines.

Hines is attempting to expand its presence in this part of the Bay Area, according to the company.

“We are excited to continue building our presence in Fremont’s lucrative R&D industrial sector with strategic acquisitions defined by attractive going-in yields, and strong upside potential with limited capital investment,” Cheikh said in a statement.

According to a marketing brochure distributed by CBRE, a commercial real estate firm, the two buildings total 141,500 square feet when combined. According to the company, CBRE brokers Tom Taylor, Matt Taylor, Craig Bevan, Robbie Taylor, and Lauren Mewes represented the seller in the transaction.

According to information posted on the LoopNet commercial property listing site, each building is slightly more than 70,000 square feet in size. According to county records, Seagate Properties, a San Rafael-based real estate firm that sold the two-building complex to Hines, purchased the property in 2021.

The industrial park was 75% leased when Seagate purchased the buildings. According to the company’s website, the site became fully occupied during its two years of ownership.

The assessed value of the two-building industrial park in June 2023 was $31.1 million, indicating rising commercial real estate prices in the area. Hines’ purchase price was 29.9% higher. According to county records, Hines paid cash for the buildings.

Following the coronavirus, a variety of office and retail properties, as well as some industrial sites, have taken a hit and experienced declining real estate values.

An uneven return to work, combined with layoffs in the tech industry, has harmed property values in the Bay Area and across the country.

However, there are still many pockets of strength. As the Hines transaction demonstrates, numerous properties have managed to maintain or increase their values.