SAN CARLOS TECHNOLOGY PARK
SAN CARLOS TECHNOLOGY PARK
1021 HOWARD AVENUE, AND 1360 AND 1390 BAYPORT AVENUE | SAN CARLOS
DOWNTOWN SAN CARLOS
INVESTMENT OPPORTUNITY
EXECUTIVE SUMMARY
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
THE OFFERING Cushman & Wakefield, as exclusive advisor, is pleased to present the exciting opportunity to acquire the fee simple interest in the San Carlos Technology Park, located at 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue, San Carlos, California (the “Property”). The 45,800 square foot R&D/Flex project comprised of three buildings is situated on 2.17 acres. The Property is fully leased at significantly below market rate rents. Situated in the GCI: General Commercial/Industrial zoning district, the area is intended to accommodate all office, R&D, industrial, and retail uses. This district provides a maximum 2.0 FAR (189,398 sq. ft.) offering flexibility of non-residential uses. Located within a mile of the San Carlos Caltrain station, the Property is also a short walk to Laurel Street’s retail amenities. Several large developments within close proximity of the Property have recently been approved, including a 560,000 square foot office/life science project and two hotels. Developers are seeking entitlements for additional office/life science projects in the area as well. Asking Price: $22,500,000 Cap Rate: 5.45%
Cushman & Wakefield Copyright 2015. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question.
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
INVESTMENT HIGHLIGHTS • Strong immediate cash flow from NNN leases with scheduled rental escalations • 100% leased with staggered roll • Future upside through bringing in-place leases to market, adaptive re-use, or redevelopment • 2.0 maximum FAR (189,398 sq. ft.) • ±75,000 square feet of R&D/flex tenancy to be displaced by a new office development less than a half mile away • Extraordinary 2.7% vacancy rate in San Carlos • Increasing rental rates due to demand outpacing supply • A short walk to abundant retail amenities throughout Downtown San Carlos • Located within a mile of the San Carlos Caltrain Station • Direct access to US Highway 101 Cushman & Wakefield Copyright 2015. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question.
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue
e Howard Avenu
San Carlos, California
1390 BAYPORT AVE 5,800 SF
1360 BAYPORT AVE 20,000 SF
1021 HOWARD AVE 20,000 SF
Bayport Avenue
PROPERTY OVERVIEW 1021 Howard Avenue 1360 Bayport Avenue 1390 Bayport Avenue San Carlos, California
45,800 Square Feet
Redevelopment 2.0 FAR | 189,398 SF
79 Parking Spaces 1.72 per 1,000 SF
2.17 Acres Land Area
100% Occupancy
3 Minute Drive Laurel Street Amenities
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California New Palo Alto Medical Foundation Development
New Honda Auto Dealership Under Construction
Approved 560,000 SF Office/Life Science Development
Marriot Residence Inn Under Construction
101
Future Office/Life Science Campus
El
Ca
mi
no
DOWNTOWN SAN CARLOS
Approved Hilton Hotel
ue
Re
al
d
r wa
n ve
A
Ho
SAN CARLOS TECH PARK
SAN CARLOS TECHNOLOGY PARK
R&D Market Report
1021 Howard Avenue, and 1360 and 1390 Bayport Avenue
101 Technology Corridor • Second Quarter 2017
Belmont/San Carlos
San Carlos, California
HEALTHY R&D MARKET FUNDAMENTALS Quarter
Total Building Base:
Market Tracker
Direct Availabilities: Sublease Availabilities: Total Availabilities:
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
1,522,100
1,522,100
1,522,100
1,522,100
1,522,100
24,726
56,941 36,757 93,698
37,565
44,552
24,726
77,541
41,333
1.0%
1.6%
6.2%
5.1%
2.7%
39,790 18,579
0 -10,000
12,112 -68,972
28,278 16,157
8,850 19,300
0
0
0
0
0
Overall Vacancy
Arrows = 12-Month Forecast
3.4%
14,726 0 14,726
Vacancy:
San Mateo County R&D/Flex Highlights Gross Absorption: Net Absorption:
0 Net Absorption
-97K
Under39,976 Construction 3,219 1.6 M
Asking Rent $3.60 NNN
• The San Mateo County R&D market closed Q2 2017 at 3.4% vacancy, 1100 basis points below its peak of 14.4% during the “great 0 0 0 0 0 recession.” Build-To-Suit: Spec Construction: 0 0 0 0 0 Total New Construction:
• In addition to low availability, much of the product base is growing older and functionally obsolete. Available Listings:
$2.85-$2.95 $2.85-$3.50 $2.75-$4.25 $2.50-$4.45 $2.25-$4.45 Market Rent Range (NNN): • Many older buildings are being removed from the market as development goes toward lab, office, and residential uses. $2.87 $3.13 $3.34 $3.71 $3.45 Avg Asking Rate (NNN):
• Over the last Availabilities two years, by Size: 85% of all rentable space in newly constructed buildings was pre-leased. 100K SF +
0
0
0
25K SF - 49.9K SF
0
0
0
0 0 0 3 3
50K SFable - 99.9K SF 0 • With supply not to meet demand, prices continue to rise0 higher and0 higher. 10K SF - average 24.9K SF 1 5 • R&D asking rates $3.60 NNN, and 30% increase from22 this time last year. Total Availabilities: 1 5
0 0 0 4 4
• Life science users are flocking toAsking the Peninsula, taking any R&D space they can find. Vacancy & Average Rate Trend 14% & Average Asking Rate Trend San Carlos Vacancy 12.8%
12%
10%
8%
6%
4%
$4.00
12.4%
14% 12.8%
7.9%
6.2%
7.9%
8%
5.1% 6.2%
4.1%
6%
3.0%
3.4%
0%
4%
3.0%
3.7%
3.4%
3.7%
0%
5.1%
2.3%
1.6%
2.3%
Q3-14 Q2-14
Q4-14 Q3-14
Q1-15 Q4-14
Q1-15
Q2-15 Q2-15
Q3-15 Q3-15
Vacancy
*Rental rates reflect asking $psf/month converted to Triple Net
2.7%
1.0%
2%
Q2-14
$3.50
$3.00
$3.00
$2.50
$2.50
$2.00
$2.00
$1.50
$1.50
$1.00
$1.00
$0.50
$0.50
$0.00
2.7%
4.1%
2%
$3.50
12.4%
12%
10%
$4.00
Vacancy
Q4-15 Q4-15
Q1-16 Q1-16
1.6% 1.0%
Q2-16
Q2-16
Q3-16 Q3-16
Q4-16 Q4-16
Q1-17
Q1-17
Q2-17
Q2-17
$0.00
Avg. Asking Rate NNN Avg. Asking Rate NNN
cushmanwakefield.com
Vallejo
101 101
SAN CARLOS TECHNOLOGY PARK
680
80
80
37 37 37 37
160 160
Benicia 780 780
1021 Howard Avenue, and 1360 and 1390 Bayport Avenue 5
5
160 160
80 80
44
San Carlos, California
44
680 680
242
242
Concord
LOCAL MAPS
11
Richmond
580
San Rafael
680 680
11
580 580 1 1
80 80
Walnut Creek
Berkeley
101 101
24 24
680 680
Oakland
80 80
82
San Ramon
San Francisco
880 880
280 280
580 580
101 101
Dublin 580
Hayward
S
101
o
H 55
Livermore
In
ve
Mountain View
an
ve
A
itt
Br DOWNTOWN SAN CARLOS
237 237
Sunnyvale
Rd
tA
Milpitas
Palo Alto
ial
or
l
St
ea
R
5 5
84 84
Menlo Park
str
yp
o
el
SAN CARLOS TECH PARK
880
in
San Carlos
880
ur
Belmont
Newark
101 101
a
C
am
n Sa
ve
A
La
Fremont 884 4
s rlo
C
San Mateo
992 2
El
Millbrae
Ba
680 680
du
580 580
380 380
d ar
ve
A
ow
H
680 680
101 101
Santa Clara
280 280
SAN CARLOS TECH PARK
San Jose
Cupertino 11
lly
Pleasanton
11
11
99 99 t
Tracy
Brisbane
280 280
120 120
205 205
85 85
880 880
Campbell Los Gatos
17 17
101 101
82
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
INVESTMENT ADVISORS Tucker Beim
Managing Director +1 650 320 0206 [email protected] Lic #01384216
Tim Howarth
Senior Director +1 650 320 0220 [email protected] Lic #00868631
MARKET ADVISORS John McLellan, Colliers
Vice President +1 650 486 2223 [email protected] Lic #01869489
Derik Benson
Managing Director +1 408 436 3670 [email protected] Lic #01182654
1950 University Avenue, Suite 220 E. Palo Alto, CA 94303 main +1 650 852 1200 fax +1 650 856 1098 cushmanwakefield.com
1021 HOWARD AVENUE, AND 1360 AND 1390 BAYPORT AVENUE | SAN CARLOS
DOWNTOWN SAN CARLOS
INVESTMENT OPPORTUNITY
EXECUTIVE SUMMARY
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
THE OFFERING Cushman & Wakefield, as exclusive advisor, is pleased to present the exciting opportunity to acquire the fee simple interest in the San Carlos Technology Park, located at 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue, San Carlos, California (the “Property”). The 45,800 square foot R&D/Flex project comprised of three buildings is situated on 2.17 acres. The Property is fully leased at significantly below market rate rents. Situated in the GCI: General Commercial/Industrial zoning district, the area is intended to accommodate all office, R&D, industrial, and retail uses. This district provides a maximum 2.0 FAR (189,398 sq. ft.) offering flexibility of non-residential uses. Located within a mile of the San Carlos Caltrain station, the Property is also a short walk to Laurel Street’s retail amenities. Several large developments within close proximity of the Property have recently been approved, including a 560,000 square foot office/life science project and two hotels. Developers are seeking entitlements for additional office/life science projects in the area as well. Asking Price: $22,500,000 Cap Rate: 5.45%
Cushman & Wakefield Copyright 2015. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question.
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
INVESTMENT HIGHLIGHTS • Strong immediate cash flow from NNN leases with scheduled rental escalations • 100% leased with staggered roll • Future upside through bringing in-place leases to market, adaptive re-use, or redevelopment • 2.0 maximum FAR (189,398 sq. ft.) • ±75,000 square feet of R&D/flex tenancy to be displaced by a new office development less than a half mile away • Extraordinary 2.7% vacancy rate in San Carlos • Increasing rental rates due to demand outpacing supply • A short walk to abundant retail amenities throughout Downtown San Carlos • Located within a mile of the San Carlos Caltrain Station • Direct access to US Highway 101 Cushman & Wakefield Copyright 2015. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question.
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue
e Howard Avenu
San Carlos, California
1390 BAYPORT AVE 5,800 SF
1360 BAYPORT AVE 20,000 SF
1021 HOWARD AVE 20,000 SF
Bayport Avenue
PROPERTY OVERVIEW 1021 Howard Avenue 1360 Bayport Avenue 1390 Bayport Avenue San Carlos, California
45,800 Square Feet
Redevelopment 2.0 FAR | 189,398 SF
79 Parking Spaces 1.72 per 1,000 SF
2.17 Acres Land Area
100% Occupancy
3 Minute Drive Laurel Street Amenities
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California New Palo Alto Medical Foundation Development
New Honda Auto Dealership Under Construction
Approved 560,000 SF Office/Life Science Development
Marriot Residence Inn Under Construction
101
Future Office/Life Science Campus
El
Ca
mi
no
DOWNTOWN SAN CARLOS
Approved Hilton Hotel
ue
Re
al
d
r wa
n ve
A
Ho
SAN CARLOS TECH PARK
SAN CARLOS TECHNOLOGY PARK
R&D Market Report
1021 Howard Avenue, and 1360 and 1390 Bayport Avenue
101 Technology Corridor • Second Quarter 2017
Belmont/San Carlos
San Carlos, California
HEALTHY R&D MARKET FUNDAMENTALS Quarter
Total Building Base:
Market Tracker
Direct Availabilities: Sublease Availabilities: Total Availabilities:
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
1,522,100
1,522,100
1,522,100
1,522,100
1,522,100
24,726
56,941 36,757 93,698
37,565
44,552
24,726
77,541
41,333
1.0%
1.6%
6.2%
5.1%
2.7%
39,790 18,579
0 -10,000
12,112 -68,972
28,278 16,157
8,850 19,300
0
0
0
0
0
Overall Vacancy
Arrows = 12-Month Forecast
3.4%
14,726 0 14,726
Vacancy:
San Mateo County R&D/Flex Highlights Gross Absorption: Net Absorption:
0 Net Absorption
-97K
Under39,976 Construction 3,219 1.6 M
Asking Rent $3.60 NNN
• The San Mateo County R&D market closed Q2 2017 at 3.4% vacancy, 1100 basis points below its peak of 14.4% during the “great 0 0 0 0 0 recession.” Build-To-Suit: Spec Construction: 0 0 0 0 0 Total New Construction:
• In addition to low availability, much of the product base is growing older and functionally obsolete. Available Listings:
$2.85-$2.95 $2.85-$3.50 $2.75-$4.25 $2.50-$4.45 $2.25-$4.45 Market Rent Range (NNN): • Many older buildings are being removed from the market as development goes toward lab, office, and residential uses. $2.87 $3.13 $3.34 $3.71 $3.45 Avg Asking Rate (NNN):
• Over the last Availabilities two years, by Size: 85% of all rentable space in newly constructed buildings was pre-leased. 100K SF +
0
0
0
25K SF - 49.9K SF
0
0
0
0 0 0 3 3
50K SFable - 99.9K SF 0 • With supply not to meet demand, prices continue to rise0 higher and0 higher. 10K SF - average 24.9K SF 1 5 • R&D asking rates $3.60 NNN, and 30% increase from22 this time last year. Total Availabilities: 1 5
0 0 0 4 4
• Life science users are flocking toAsking the Peninsula, taking any R&D space they can find. Vacancy & Average Rate Trend 14% & Average Asking Rate Trend San Carlos Vacancy 12.8%
12%
10%
8%
6%
4%
$4.00
12.4%
14% 12.8%
7.9%
6.2%
7.9%
8%
5.1% 6.2%
4.1%
6%
3.0%
3.4%
0%
4%
3.0%
3.7%
3.4%
3.7%
0%
5.1%
2.3%
1.6%
2.3%
Q3-14 Q2-14
Q4-14 Q3-14
Q1-15 Q4-14
Q1-15
Q2-15 Q2-15
Q3-15 Q3-15
Vacancy
*Rental rates reflect asking $psf/month converted to Triple Net
2.7%
1.0%
2%
Q2-14
$3.50
$3.00
$3.00
$2.50
$2.50
$2.00
$2.00
$1.50
$1.50
$1.00
$1.00
$0.50
$0.50
$0.00
2.7%
4.1%
2%
$3.50
12.4%
12%
10%
$4.00
Vacancy
Q4-15 Q4-15
Q1-16 Q1-16
1.6% 1.0%
Q2-16
Q2-16
Q3-16 Q3-16
Q4-16 Q4-16
Q1-17
Q1-17
Q2-17
Q2-17
$0.00
Avg. Asking Rate NNN Avg. Asking Rate NNN
cushmanwakefield.com
Vallejo
101 101
SAN CARLOS TECHNOLOGY PARK
680
80
80
37 37 37 37
160 160
Benicia 780 780
1021 Howard Avenue, and 1360 and 1390 Bayport Avenue 5
5
160 160
80 80
44
San Carlos, California
44
680 680
242
242
Concord
LOCAL MAPS
11
Richmond
580
San Rafael
680 680
11
580 580 1 1
80 80
Walnut Creek
Berkeley
101 101
24 24
680 680
Oakland
80 80
82
San Ramon
San Francisco
880 880
280 280
580 580
101 101
Dublin 580
Hayward
S
101
o
H 55
Livermore
In
ve
Mountain View
an
ve
A
itt
Br DOWNTOWN SAN CARLOS
237 237
Sunnyvale
Rd
tA
Milpitas
Palo Alto
ial
or
l
St
ea
R
5 5
84 84
Menlo Park
str
yp
o
el
SAN CARLOS TECH PARK
880
in
San Carlos
880
ur
Belmont
Newark
101 101
a
C
am
n Sa
ve
A
La
Fremont 884 4
s rlo
C
San Mateo
992 2
El
Millbrae
Ba
680 680
du
580 580
380 380
d ar
ve
A
ow
H
680 680
101 101
Santa Clara
280 280
SAN CARLOS TECH PARK
San Jose
Cupertino 11
lly
Pleasanton
11
11
99 99 t
Tracy
Brisbane
280 280
120 120
205 205
85 85
880 880
Campbell Los Gatos
17 17
101 101
82
SAN CARLOS TECHNOLOGY PARK 1021 Howard Avenue, and 1360 and 1390 Bayport Avenue San Carlos, California
INVESTMENT ADVISORS Tucker Beim
Managing Director +1 650 320 0206 [email protected] Lic #01384216
Tim Howarth
Senior Director +1 650 320 0220 [email protected] Lic #00868631
MARKET ADVISORS John McLellan, Colliers
Vice President +1 650 486 2223 [email protected] Lic #01869489
Derik Benson
Managing Director +1 408 436 3670 [email protected] Lic #01182654
1950 University Avenue, Suite 220 E. Palo Alto, CA 94303 main +1 650 852 1200 fax +1 650 856 1098 cushmanwakefield.com
