The Dallas office of Clarion Partners has paid $26.55 million, or nearly $85 per square foot, to acquire the 312,866 square foot industrial asset located at 1936-1980 West Avenue 140th Street in San Leandro, according to information provided by Kidder Mathews.
Clarion Partners did not respond to several phone calls seeking comment for this story. The seller of the property was Sears. It had hired JLL to be involved in the sale. The listing agent declined to discuss the sales price on the property.
Subsequent to the sale of the property, there was a major lease signed for the location. This was for around 274,000 square feet with Friant, a high-end office furniture manufacturer. This lease runs for 90 months.
The new tenant was represented in the lease by Mike Barry, a senior vice president with CBRE in its Oakland office. "The tenant had been looking for some new space where it would be able to consolidate its three offices into one centralized location. One of its existing locations was around 120,000 square feet on High Street in Oakland. The company wanted to keep it close to its existing facilities, so it would not lose any of its employees during the move," says Barry.
The tenant had been looking for space for a while. "It was about a year into it, before we found the opportunity in San Leandro. We were limited on where we could look because of the size requirements, the areas the tenant could move into and the fact that the industrial market in the East Bay has a current vacancy in the range of one percent to three percent," said Barry.
The property will be a mixture of manufacturing, assembly, office and showroom kind of space for the new tenant. "There will be around 9,500 square feet of office space that will be the home of the executive offices for the tenant. There also will be a showroom to display the company's latest new products," said Jason Ovadia, a managing director with JLL for industrial and logistics properties in its Walnut Creek office. He was involved in both the sale of the property and the leasing efforts for the new ownership.
Sears will continue to have a retail store operation in the property. This will total around 30,000 square feet. Friant will have the first right of refusal on this space should Sears decide to vacate the property.
Friant will be ready to move into the property sometime in the first quarter of 2017. Clarion is planning to transform the asset from a B- quality asset up to a B+ property. The real estate investment firm acquired the property for its open-ended commingled fund the Lion Industrial Trust. It only invests in industrial properties in a variety of markets around the country.