Redco Picks Up Sunnyvale Industrial Facility for $42 Million

Redco Development continues to add to its Bay Area real estate holdings with its latest industrial acquisition in the region.

The San Francisco-based firm acquired a vacant UPS facility in Sunnyvale for $42 million, the Silicon Valley Business Journal reported. Redco plans to redevelop the 160,000-square-foot building at 1245 Hammerwood Avenue into a 265,000-square-foot industrial building.

Redco acquired the 13-acre property from UPS subsidiary Valacal Company. The real estate firm was attracted to the site’s proximity to major highways and Levi’s Stadium in Santa Clara, which just hosted Super Bowl LX. The company hopes to bring in more warehouse, research and development tenants, including those in the auto and robotics industries.

Construction on the project is expected to begin toward the end of this year with the redevelopment effort projected to take 12 months. Redco is looking to build a structure like its Diablo Park industrial site in Hayward.

“There’s not many new industrial buildings that get built — period — and in West Valley,” Redco co-founder Chris Freise told the Business Journal. “Everything’s kind of getting built in Fremont and Milpitas. It’s rare to get this here.”

UPS announced plans to sell off properties last year in an effort to save $3.5 billion annually by 2028, according to the Business Journal. The parcel delivery giant sold 93 buildings last year and also retired an aircraft fleet, automated work at 57 facilities and identified 24 buildings to close in the first half of this year.

Redco was founded in 2019 and hasn’t taken its foot off the gas with acquisitions and development projects since then.

Last fall, the firm acquired Wells Fargo’s former headquarters at 420 Montgomery Street in San Francisco for $55 million. The offices are largely vacant after Wells Fargo moved much of its operations to a 620,000-square-foot space at 333 Market Street last year. Earlier this month, the San Jose Planning Commission backed Redco in its efforts to build its Willow Glen apartment community, rejecting an appeal from locals to block the 126-unit, seven-story building.

Redco is looking to acquire more industrial and multifamily sites in the coming months, according to the Business Journal. “We’re always actively looking,” Freise said.

— Chris Malone Méndez