By Barbra Murray
Trammell Crow Co. and Principal Real Estate Investors have taken a step to help quench industrial users’ thirst for space in metropolitan Oakland, Calif. The partners just commenced construction of San Leandro Business Center, a 552,000-square-foot speculative project that will offer high-tech manufacturing, assembly and distribution space in San Leandro, Calif.
“We have designed this rare, interior Bay Area project with the flexibility to accommodate single tenant or multi-tenant users and a wide variety of industrial applications,” Parker Larson, senior associate with Trammell Crow Co., said in a prepared statement.
San Leandro Business Center, designed by architectural firm HPA, will take shape on a 30-acre site along the I-880 Corridor. The Class A property will feature two smaller buildings consisting of 121,600 square feet and 137,100 square feet each; and a larger 293,900-square-foot structure.
“In an aging, supply-constrained, and core industrial market like this one, modern building design—with sufficient utility infrastructure, flexible parking applications, and devisable and higher-clearance interior spaces—is absolutely critical to attracting today’s broad base of industrial tenants,” Larson told Commercial Property Executive. TCC and Principal have tapped commercial real estate services firm CBRE Inc. to handle leasing of the complex.
No pre-leases, no problem
Overall, the U.S. industrial market is experiencing record lows, and metropolitan Oakland is no exception; TCC and Principal are going spec in the right market at the right time. The total industrial vacancy rate is a desirable 1.8 percent in Oakland, according to a third quarter report by CBRE, and an even more enviable 0.6 percent in San Leandro. As noted in the CBRE report, “Five years of unprecedented user demand, positive net absorption and pre-leased construction completions have fostered a competitive environment for investors and tenants alike.”
With Lusardi Construction aboard as general contractor, TCC and Principal plan to deliver San Leandro Business Center in the fall of 2018.
Image courtesy of Trammell Crow Co.