FREMONT, CA—Demand for industrial product has held steady throughout this downturn, and increased high-volume leasing activity portends future growth for this metric as tenants move into currently vacant spaces in 2020, according to a second quarter report by Cushman & Wakefield. The latest example is an 89,336-square-foot logistics building, 44370 Christy St., that Dermody Properties acquired last year. The national company focused exclusively on the logistics real estate sector recently leased the building to a San Jose-based company.
“The Fremont submarket is a business-friendly environment with direct access to the greater San Francisco Bay Area,” said George Condon, West region partner for Dermody Properties. “This property offers a prime location and access to a strong labor pool.”
The building is situated on 6.51 acres within the Fremont submarket. The property offers direct frontage and access to Interstate 880 as well as access to Interstate 680, providing close proximity to two of the three main commuter freeways running through the Silicon Valley.
“We believe the advanced manufacturing buildings in Fremont like 44370 Christy St. provide manufacturing companies in the Silicon Valley with more functional and affordable buildings than anywhere else in the Silicon Valley,” Condon tells GlobeSt.com. “As the technology industry continues to grow, manufacturers will continue to move to Fremont.”
Greg Matter, Eddie Shuai and David Sesi of JLL represented Dermody Properties in this lease.
“This property and its offerings align with Dermody Properties’ acquisition and development strategy that targets high-quality logistics assets in attractive markets for our customers,” said Shelagh Danna, vice president of investments for Dermody Properties.
The Silicon Valley industrial market closed the second quarter at -497,000 square feet. This total brings mid-year net absorption to a still positive 144,000 square feet, which is up from -1.2 million square feet through the first two quarters of 2019, says the Cushman & Wakefield report.
Meanwhile, asking rents hold, with the average asking rent for industrial space in Silicon Valley in the second quarter at $1.17 per square foot on a monthly triple net basis, down from $1.19 in the first quarter. The average asking rent for warehouse and manufacturing space decreased by $0.03 and $0.04 respectively quarter-over-quarter. Asking rents remain slightly elevated from the fourth quarter of 2019. New buildings are becoming more technologically advanced and placing upward pressure on rents, while functionally obsolete buildings and subleases have tamped down even steeper increases, Cushman & Wakefield research indicates.
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