Trending
One of the Bay Area’s largest industrial projects gets $220M refinancing loan
The 110-acre development is unlike any other to come before it due to its sheer size and diverse roster of tenants
UPDATED, 9:18 a.m., Sept. 15, 2021: The joint venture behind Pacific Commons South, one of the Bay Area’s largest industrial projects, landed a $220 million loan to refinance it.
Overton Moore Properties and Invesco Ltd. obtained the 12-year financing from an unidentified life insurance company for the 1.7 million-square-foot complex, according to CBRE, which arranged the loan on behalf of the venture.
Under its terms, Overton Moore and Invesco will pay only interest on it for a set period; CBRE’s release did not disclose the length of the interest-only term of the loan.
CBRE’s Michael Walker, who co-led the team with Brad Zampa, said the new loan refinances a construction loan that Overton Moore and Invesco used to build the project. A dozen different banks and life insurance companies competed “aggressively” for the refinancing opportunity, Walker said. He declined to disclose the name of the provider, how much existing debt the loan replaced or its interest rate, although he said the rate was one of the lowest his team has seen in the last 12 months.
A representative for Overton Moore, Pacific Commons South’s developer, didn’t respond to a request for comment. An official at Invesco, the project’s equity partner, didn’t respond to a request for comment by press time.
Located in the East Bay city of Fremont, Pacific Commons South is a 110-acre industrial development that’s now home to seven Class A industrial buildings and a 10.35-acre parking lot.
All but one of those buildings is leased to Amazon, Facebook, Bloom Energy, Sana Biotechnology and Cepheid, a diagnostic test manufacturer. The parking lot is being rented by Amazon, Pacific Commons South’s largest tenant, which reportedly plans to create a 369,180-square-foot delivery center and use the surface lot as a fleet yard with 1,080 parking spaces for delivery vans and employee vehicles.
Neither Amazon, Facebook nor Cepheid have publicly disclosed their lease terms at Pacific Commons South. That said, Sana Biotechnology said in a Securities and Exchange Commission filing last month that it’s paying about $1.22 a square foot a month at the start of its lease term, with 3 percent annual increases. The company signed a 10-year lease on a 163,193-square-foot building within the development.
Bloom Energy, meanwhile, is paying $1.18 a square foot a month during the first full year of its lease, with 3 percent annual increases, according to a copy of its lease agreement dated March 13. The fuel cell maker signed a seven-and-a-half-year lease on a 164,293-square-foot building at Pacific Commons South.
The only part of the project that’s available for lease is around its northeast corner, which contains a completed, 101,191-square-foot structure and two yet-to-be-built buildings totaling 59,046 square feet combined. A CBRE team of Rob Shannon, Chip Sutherland and Robert Ferraro is Pacific Commons South’s listing broker.
This updated version includes the complex’s total square footage.