FREMONT — A big Texas real estate company has bought a Fremont tech and industrial park in a $40.4 million all-cash deal that signals rising property values for the site amid a tough post-coronavirus economic landscape.
Hines U.S. Property Partners, acting through an affiliate, bought the two-building complex at 48603 and 48633 Warm Springs Road in Fremont., according to documents filed Oct. 11 with the Alameda County Recorder’s Office. Current tenants include an electronics manufacturer, energy firms and an optical products maker.
A vast Tesla electric vehicle factory is a few miles away, and the area is dotted with an array of tech and advanced manufacturing companies.
Houston-based Hines is one of the nation’s largest and most successful development and investment firms, and its transactions and projects are sometimes seen as bellwethers for the current state of the commercial real estate market.
Hines said it was drawn to the Warm Springs district of Fremont, an area that the city has been attempting to bolster 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,” said Sam Cheikh, managing director at Hines.
Hines is attempting to widen its footprint in this part of the Bay Area, the company added.
“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.
Together, the two buildings total 141,500 square feet, according to a marketing brochure offering the property for sale that was circulated by CBRE, a commercial real estate firm. CBRE brokers Tom Taylor, Matt Taylor, Craig Bevan, Robbie Taylor and Lauren Mewes represented the seller in the deal, according to the company.
Each building is slightly more than 70,000 square feet in size, according to information posted on the LoopNet commercial property listing site. Seagate Properties, a San Rafael-based real estate company that sold the two-building complex to Hines, had bought the property in 2021, county documents show.
At the time Seagate bought the buildings, the industrial park was 75% leased. During its two years of ownership, the site became fully occupied, the company states on its website.
In a sign of rising commercial real estate prices in the area, in June 2023, the assessed value of the two-building industrial park was $31.1 million. The price that Hines paid was 29.9% higher. Hines bought the buildings in an all-cash deal, county records show.
In the wake of the coronavirus, an array of office and retail properties, along with some industrial sites, have taken a hit and suffered declining real estate values.
An uneven return to work along with tech industry layoffs have helped to undermine property values in the Bay Area and nationwide.
However, plenty of pockets of strength remain. Numerous properties have managed to maintain or increase their values, as the Hines deal shows.
