WORLD CLASS LOCAL EXPERTISE INTERNATIONAL REACH MARKET SNAPSHOT TOTAL AVAILABLE SF BY SUBMARKET. I-880 Corridor Quarterly Report INDUSTRIAL MARKET

Transcription

1 I-88 Corridor Quarterly Report INDUSTRIAL MARKET SECOND QUARTER 218 LOCAL EXPERTISE INTERNATIONAL REACH WORLD CLASS MARKET SNAPSHOT North I-88 Industrial Inventory: 57,94,882 North I-88 Industrial Availability: 1,517,361 North I-88 Industrial Availability Rate: 2.52% New construction of Class "A" Warehouse and Advanced Manufacturing buildings along the I-88 Corridor from Richmond through North San Jose is very strong. Roughly 5.5 Million Square Feet of new product is hitting the market with an underlying question being, will the demand be there to support the needed rents in this very expensive market? Expensive not only in terms of values and rents, but also in construction costs, materials and contractor demand. We have seen several projects get delayed by contractors that are stretched too thin, city delays, etc. Additionally, we see most projects running over budget as costs continue to increase in the Bay Area. Notable recent pre-leasing and build to suits include the following under construction projects: 175,±SF in San Leandro (UPS) 3,±SF in Richmond (Mattress Firm) 225,±SF in Newark (Facebook) See our Under Construction & Transactions sections for details I-88 Industrial Inventory: 79,845,962 I-88 Industrial Availability: 2,517,518 I-88 Industrial Availability Rate: 2.35% Fremont/Newark Industrial Inventory: 55,613,739 Fremont/Newark Industrial Availability: 2,313,275 Fremont/Newark Industrial Availability Rate: 4.16% TOTAL AVAILABLE SF BY SUBMARKET 2,313, ,538 47,556 49,23 769,644 1,351,39 34,161 We appreciate your business and invite you to contact us with any questions or comments you may have regarding commercial properties in the East Bay. We look forward to working with you! Berk/Emery San Leandro Oakland Union City Hayward Richmond Fremont/Newark - Craig Hagglund, SIOR, Managing Principal Lee & Associates - Oakland Lee & Associates maintains an up-to-date database of all available properties and sold/leased properties.

2 I-88 Corridor Quarterly Report NORTH I-88 MARKET STATISTICS SECOND QUARTER 218 QUARTER IN REVIEW MARKET INVENTORY AVAILABILITY AVAILABILITY RATE Buildings Total SF Direct SF Sublease SF Available SF Direct Total BERKELEY/EMERYVILLE INDUSTRIAL/WAREHOUSE 42 9,156, , , % 3.43% 82 3,352,548 93,67 93, % 2.79% TOTAL 52 12,58,732 47,556 47, % 3.26% OAKLAND INDUSTRIAL 1,239 22,642,46 467,62 73, , % 2.39% MULTI TENANT/INCUBATOR ,246 18,287 18, % 6.28% 116 1,983,76 7,7 7,7.39%.39% WAREHOUSE/DIST 82 6,35,683 22,439 22, % 3.21% TOTAL 1,479 31,222, ,46 73, , % 2.47% RICHMOND INDUSTRIAL 286 7,2, , , % 2.81% MULTI TENANT/INCUBATOR 23 1,142,316 1,626 3, 13,626.93% 1.19% ,882 19,935 19, % 2.45% WAREHOUSE/DIST 39 4,44,369 19,945 19, % 2.5% TOTAL 37 13,363, ,161 3, 34, % 2.55% MARKET TOTAL 2,351 57,94,882 1,44,763 76,598 1,517, % 2.66% AVAILABLE/ABSORPTION HISTORY 6,5, 6,, 5,5, 5,, 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, 3, 2, 1, , -2, -3, -4, -5, -6, -7, -8, , NORTH I-88 AVAILABLE NORTH I-88 ABSORPTION

3 I-88 Corridor Quarterly Report NORTH I-88 MARKET STATISTICS SECOND QUARTER 218 QUARTER IN REVIEW BERKELEY/EMERYVILLE INDUSTRIAL - RYAN DAVIDSON West Berkeley continues to show its strength as a sought after market for creative investment opportunities. Leasing also continues to remain steady within the submarket with three new leases at strong pricing. The big news for Emeryville is the purchase of a five-building, 131,451±SF portfolio, commonly known as the Emeryville Exchange. Hackman Capital reportedly paid $41.5MM for the package which was 87% occupied by sixteen tenants at closing. Notable Sale from the 2 nd Quarter: 22,±SF to Bruce Gordon th Street Notable Leases from the 2 nd Quarter: 16,5±SF to Ciel Creative 932 Parker Street at $1.2/SF IG 8,86±SF to Embodied Intelligence 77 Heinz Avenue at $1.45/SF IG 8,24±SF to Thistle Health th Street at $1.5/SF IG OAKLAND INDUSTRIAL - DREW FISCHER The 2 nd Quarter for the Oakland Industrial Market did not have the quantity or deal size of the previous period, but what stood out are some of the per square foot prices. Owner/user sales are the key indicator for the I-88 Industrial Corridor. We specifically want so see sub 25,±SF owner/user activity, as that is the majority of the inventory. This Quarter we saw $3/ SF on 1,-15,±SF buildings. How much higher will the market accept? The scarcity in the marketplace and the attraction is creating all time highs for industrial product. Notable Sales from the 2 nd Quarter: 14,74±SF to th Street, LLC th Street for $291.76/SF 8,238±SF to Gill s Electric Company 99 7 th Street for $35.54/SF, 5,, 5,, 5,, 5, 6, 5, 4, 3, 2, 1, INDUSTRIAL/WAREHOUSE INDUSTRIAL MULTI TENANT/INCUBATOR Notable Leases from the 2 nd Quarter: 88,56±SF to Royal Coffee 6195 Coliseum Way (relocation & expansion within the same complex) WAREHOUSE/DIST RICHMOND INDUSTRIAL - BRIAN BARDEN The 2 nd Quarter proved once again it's a seller s market. The cannabis industry continues to drive pricing upwards and the Richmond market is greatly benefiting. For the first time Richmond is seeing industrial prices nearing $2/SF with some flex buildings selling. Leasing has been relatively quiet with only a couple sub 1,±SF industrial deals completed, however there are multiple 2,±SF deals currently in negotiation. Additionally, there are multiple 1,±SF development projects underway with late 218/early 219 delivery dates and we expect to see some large lease deals with record rates completed in the near future. 25, 2, 15, 1, 5, INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST Notable Sale from the 2 nd Quarter: 79,624±SF to Walden Management Marina Bay Parkway 21,822±SF to CA State Lottery 618 S. 8 th Street 2,5±SF to The Floor Store 3443 Regatta Boulevard

4 I-88 Corridor Quarterly Report I-88 MARKET STATISTICS SECOND QUARTER 218 QUARTER IN REVIEW MARKET HAYWARD SAN LEANDRO UNION CITY INVENTORY AVAILABILITY AVAILABILITY RATE Buildings Total SF Direct SF Sublease SF Available SF Direct Total INDUSTRIAL ,155, ,863 46, , % 1.43% MULTI TENANT/INCUBATOR 165 2,155,99 26,825 26, % 1.24% 74 3,321, ,85 4, , % 4.75% WAREHOUSE/DIST ,817, , , , % 4.29% TOTAL 1,324 43,45,738 1,52, ,728 1,351, % 3.11% INDUSTRIAL ,676,19 312,338 37,5 349, % 2.76% MULTI TENANT/INCUBATOR ,162 34,341 34, % 5.77% 34 1,388,821 2,61 2,61.19%.19% WAREHOUSE/DIST 94 7,567,385 93,441 1, 13, % 1.37% TOTAL ,227, ,73 47,5 49, % 2.21% INDUSTRIAL 19 3,442,893 89,724 8,1 97, % 2.84% MULTI TENANT/INCUBATOR ,117.%.% ,41 11,365 11, % 2.59% WAREHOUSE/DIST 15 9,99, , , , % 5.72% TOTAL 25 14,167, , , , % 4.77% MARKET TOTAL 2,142 79,845,962 1,879, ,2 2,517, % 3.15% AVAILABLE/ABSORPTION HISTORY 1,, 75, 9,, 5, 8,, 25, 7,, 6,, -25, ,, -5, 4,, -75, 3,, -1,, 2,, -1,25, 1,, -1,5, ,75, -2,, I-88 AVAILABLE I-88 ABSORPTION

5 I-88 Corridor Quarterly Report I-88 MARKET STATISTICS SECOND QUARTER 218 QUARTER IN REVIEW HAYWARD INDUSTRIAL - CRAIG HAGGLUND, SIOR The Hayward Market encompasses roughly 43 million square feet of Warehouse/Distribution, Industrial, Multi-Tenant/Incubator and Flex/R&D space. Hayward remains a top submarket for both Investors and Tenants. Both the sale and lease markets remain very tight with little product offered, however we are seeing new construction such as Blackcreek s 55,±SF Class A warehouse project on W. Winton Avenue. 1,, 9, 8, 7, 6, 5, 4, 3, 2, 1, Notable Sale from the 2 nd Quarter: 1,32±SF to Transpac Corsair Boulevard 65,267±SF to Huntwood, LLC Huntwood Avenue INDUSTRIAL MULTI TENANT/INCUBATOR WAREHOUSE/DIST Notable Lease from the 2 nd Quarter: 42,±SF to Accent Building Supply 3527 Arden Road 72,775±SF to Compass Group, Inc Arden Road 64,916±SF to Temco Logistics 282 W. Winton Avenue SAN LEANDRO INDUSTRIAL - CHRIS SCHOFIELD, SIOR The San Leandro Market encompasses roughly 22 million square feet of Warehouse/Distribution, Industrial, Multi-Tenant/Incubator and Flex/R&D space. Market surveys show the overall vacancy at 2.21% - up from 1.61% last Quarter. Warehouse/Distribution product remains strong at just 1.37% vacant. Due to a lack of inventory, very few new leases and sales were completed in the 2 nd Quarter. There were two significant investment deals that took place with a third going into contract and set to close this Quarter. The most significant lease deal took place in the new San Leandro Business Center, where UPS preleased 121,±SF. With vacancy this low, we anticipate both lease rates and sale prices will continue to rise over the next quarter. 7, 6, 5, 4, 3, 2, 1, 7, 6, 5, 4, 3, 2, 1, INDUSTRIAL INDUSTRIAL MULTI TENANT/INCUBATOR Notable Sales from the 2 nd Quarter: 583,±SF to COLFIN Industrial Owner, LLC Doolittle Drive & Williams Street for $1,5,/4.25% CAP 41,1±SF to B.P. Management 575 Marina Boulevard for $16,5,/5.6% CAP UNION CITY INDUSTRIAL - RYAN MARTENS The Union City market consists of roughly 14 million square feet of Warehouse/Distribution,Industrial, Multi-Tenant/Incubator and Flex/R&D space. Union City s vacancy rate continues to decrease, now sitting under 5%. We expect to see increased lease & sale values throughout the year as inventory remains extremely low. Notable Sales from the 2 nd Quarter: 52,± SF to Exeter th Street 43,2± SF to United Mechanical Inc Lewis Avenue MULTI TENANT/INCUBATOR WAREHOUSE/DIST WAREHOUSE/DIST Notable Leases from the 2 nd Quarter: 86,41± SF to Weber Logistics 33 Whipple Road (renewal)

6 I-88 Corridor Quarterly Report FREMONT/NEWARK MARKET STATISTICS SECOND QUARTER 218 QUARTER IN REVIEW MARKET INVENTORY AVAILABILITY AVAILABILITY RATE Total SF Direct SF Sublease SF Available SF Direct Total FREMONT/NEWARK INDUSTRIAL/WAREHOUSE 31,938,739 1,18,915 46,36 1,226, % 3.84% 23,675, 1,26,344 59,98 1,86, % 4.59% MARKET TOTAL 55,613,739 2,27,259 16,16 2,313, % 4.16% FREMONT/NEWARK INDUSTRIAL - ANDREW STODDARD Last Quarter in the Fremont/Newark submarket saw strong tenant demand driven by the automotive and transportation sectors, as well as from the traditional technology and distribution users. However many of the large lease transactions were renewals. Construction is underway at the largest industrial development in the Bay Area - The Pacific Commons Industrial Center (1,8,±SF). This speculative warehouse project is scheduled for delivery at the end of this year. Notable Sales from the 2 nd Quarter: 22,22±SF to Golden Sand Investment W. Northport Loop 52,321±SF to REV Projects Landing Parkway Notable Leases from the 2 nd Quarter: 132,9±SF to OnTrac Boyce Road (renewal) 8,558±SF to Inside Source 791 Central Avenue (renewal) 5,4±SF to Tesla 125 Page Avenue 1,4, 1,2, 1,, 8, 6, 4, 2, INDUSTRIAL/WAREHOUSE AVAILABLE/ABSORPTION HISTORY 8,, 4, 325,784 7,, 6,, 5,, 5,441,426 6,7,653 6,682,74 6,389,177 6,132,581 5,539,123 4,989,579 7,18,173 6,6,955 5,525,583 5,43,362 4,663, , 2, 12,595 69,879 62,151 23, ,399 4,, 3,, 2,, 4,141,778 3,193,324 3,167,29 2,42,644 1,984,778 1,683,585 2,412,836 2,229,566 2,719,642 2,176,34 1,975,959 2,69,63 2,313,275 2,7,224-2, -4, -114,96-1,45-122, , , , ,26-279, , , ,86-122, ,174-6, 1,, - -8, -79, ,, -916,344 FREMONT/NEWARK AVAILABLE FREMONT/NEWARK ABSORPTION

7 I-88 Corridor Quarterly Report UNDER CONSTRUCTION SECOND QUARTER 218 MARKET SNAPSHOT 555,±SF, SAN LEANDRO DEVELOPER: TRAMMEL CROW 256,136±SF, OAKLAND DEVELOPER: PROLOGIS LEASED 231,66±SF, OAKLAND DEVELOPER: PROLOGIS Under Construction Class A Warehouse Phase I - State of the Art Class A Warehouse Development Phase II - State of the Art Class A Warehouse Development Under Construction 84,16±SF, MILPITAS DEVELOPER: MCCARTHY RANCH 2,53,±SF, FREMONT DEVELOPER: OVERTON & CONNOR 75,2±SF, SAN LEANDRO DEVELOPER: DCT Phase 1 Delivery Q2 218 Two Buildings Totaling 45,61±SF 11 Buildings on 143± Acres Construction Slated for 218 Under Construction Under Construction Class A Warehouse 296,698±SF, SAN LEANDRO DEVELOPER: OVERTON MOORE LEASED 44,234±SF, OAKLAND DEVELOPER: CENTERPOINT 566,725±SF, RICHMOND DEVELOPER: SCANNELL Class A Warehouse Situated on 13± Acres Phase I - Class "A" Industrial Facility Exclusive Seaport Development Two Proposed Class A Warehouses Delivery Q2 219

8 I-88 Corridor Quarterly Report TRANSACTIONS SECOND QUARTER 218 INDUSTRIAL - 136,785±SF LEASED 625 N. MCCARTHY BLVD., MILPITAS SF MOTORS INDUSTRIAL - 121,643±SF LEASED 1 HALCYON DRIVE, SAN LEANDRO UPS INDUSTRIAL - 1,32±SF SOLD CORSAIR BLVD., HAYWARD HAYWARD7, LLC INDUSTRIAL - 88,56±SF LEASED 6195 COLISEUM WAY, OAKLAND ROYAL COFFEE INDUSTRIAL - 86,41± SF LEASED LINCOLN ALVARADO BUSINESS PARK WEBER LOGISTICS INDUSTRIAL - 79,624± SF SOLD MARINA BAY CROSSINGS WALDEN MANAGEMENT INDUSTRIAL - 72,775± SF LEASED 3536 ARDEN ROAD, HAYWARD COMPASS GROUP, INC. INDUSTRIAL - 65,267± SF SOLD HUNTWOOD BUSINESS PARK HUNTWOOD, LLC INDUSTRIAL - 64,916± SF LEASED 282 W. WINTON AVENUE, HAYWARD TEMCO LOGISTICS INDUSTRIAL - 52,321±SF LEASED LANDING PKWY., FREMONT REV PROJECTS INDUSTRIAL - 52,± SF SOLD TH STREET, UNION CITY EXETER LAND ± ACRES SOLD 315 HAYMAN STREET, HAYWARD DCT INDUSTRIAL

9 I-88 Corridor Quarterly Report EXCLUSIVE LEE LISTINGS SECOND QUARTER 218 AVAILABLE: 5.47± ACRES SMITH AVENUE, NEWARK AVAILABLE: 142,322± SF DAVIS COURT, HAYWARD AVAILABLE: 128,168± SF TH AVENUE, OAKLAND FOR SALE /SALE FOR SALE AVAILABLE: 45,± SF AVAILABLE: 29,991± SF AVAILABLE: 29,45± SF 35 CARLSON BOULEVARD, RICHMOND HOTCHKISS STREET, FREMONT O NEIL AVENUE, HAYWARD /SALE AVAILABLE: 26,552± SF 15 ATLANTIC STREET, UNION CITY AVAILABLE: 25,5± SF 2855 MILLER STREET, SAN LEANDRO AVAILABLE: 16,12± SF EDEN LANDING ROAD, HAYWARD FOR SALE AVAILABLE: 12,247± SF 2352 BERNHARDT STREET, HAYWARD AVAILABLE: 1,25± SF - 1,±SF CLIPPER COURT CENTER, FREMONT /SALE AVAILABLE: 1,± SF 298 CHAPMAN STREET, OAKLAND

10 I-88 Corridor Quarterly Report YOUR OAKLAND TEAM SECOND QUARTER 218 INDUSTRIAL AGENTS Brian Barden Associate Zack Barnes Associate Ryan Davidson Principal Garrett Drew Principal Drew Fischer Principal Craig Hagglund, SIOR Principal Jesse Lucas Principal Ryan Martens Principal Doug Pearson Principal Chris Schofield, SIOR Principal Michael Schofield Principal Andrew Stoddard Principal Nate Vance Associate INVESTMENT AGENTS Rick Bland Principal David Scarpinato Principal Winston Street Associate Guy Warren Principal OFFICE AGENTS Neil Cowperthwaite Associate Ben Jones Principal Dave McCarty Principal Joseph McGlynn Associate RETAIL AGENT Cass Gulden Associate ABOUT LEE & ASSOCIATES Lee & Associates, founded in 1979, is one of the largest regional commercial real estate providers in the United States. Since 1979, our seasoned, motivated shareholders and professionals have been offering comprehensive quality service nationally and locally in a pro-active manner. We develop customized solutions for all of your real estates needs through our market-to-market knowledge in all property types. Our unique business model and extensive experience has helped us become one of the largest commercial real estate providers in the United States.