Clarion Partners Buys Huge Fremont Industry Building

Clarion Partners has bought a 267,100-square-foot industrial building leased by Tesla in Fremont for $132.3 million.

An affiliate of the New York-based investor bought the year-old property at 49000 Milmont Drive, in Warm Springs, the East Bay Times reported. The sellers were Houston-based Hines and Los Angeles-based Oaktree Capital Management.

The deal works out to $495 per square foot. The brokers behind the sale were not disclosed.

Hines and Oaktree bought the 14-acre property containing a handful of aging research buildings in 2021 for $47 million, or $225 per square foot. After receiving financing, they redeveloped the site into a modern manufacturing facility.

The white and red plant known as Milmont Industrial opened last year with first floor and mezzanine offices, 27 dock-high doors and 427 parking slots, not far from Interstates 880 and 680, according to Loopnet.

In April, Tesla leased the building for undisclosed terms, with CBRE handling the transaction.

The electric vehicle manufacturer struck the deal while ramping up artificial intelligence applications and humanoid robots. The Texas-based company led by Elon Musk also has a sprawling car factory in the South Fremont District that builds its Model 3 and Model Y cars and its Tesla Optimus bot, according to its website.

Fremont has emerged as an industrial and manufacturing hub for the Bay Area, making up 75 percent of advanced manufacturing leasing activity in Silicon Valley last year, according to CBRE.

This month, the Florida-based Sterling Organization filed plans to spend $18 million to renovate a former Fry’s store at 43800 Osgood Road into a 143,800-square-foot industrial building designed to meet the demand for manufacturing.

Clarion Partners, a private equity firm founded in 1982, has $76.2 billion in assets under management, including 1,350 industrial, life sciences, retail, commercial and residential properties in the U.S. and Europe, according to its website.

– Dana Bartholomew