Duke Realty takes another Bay Area step as San Jose OKs 303K sf project

Indianapolis REIT is on the march in region, pitching projects in five cities in recent years

The research building at 5863 Rue Ferrari with Drew Hess, Duke Realty’s senior vice president of Northern California and Seattle (LinkedIn, Loopnet)
The research building at 5863 Rue Ferrari with Drew Hess, Duke Realty’s senior vice president of Northern California and Seattle (LinkedIn, Loopnet)

Duke Realty, the Indianapolis developer that’s been expanding its reach in the Bay Area, got approval from San Jose, the region’s largest city, to build a 303,000-square-foot industrial facility.

The REIT plans to knock down two empty research buildings in South San Jose to build the structure. It aims to redevelop more than 17 acres at 5853 and 5863 Rue Ferrari and build 296 parking spots for cars and vans, almost three times as many required for a project of its size, and 108 spots for trucks.

It would be among the largest of its kind in the city, behind Hines’s 404,000-square-foot project about a mile north and Bridge Industrial’s four-building, 719,400-square-foot complex in North San Jose. Duke didn’t respond to a request for comment.

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It’s two miles east of where the company is seeking to build another industrial development that’s almost the same size. It filed plans with the city in October for a 282,000-square-foot building on 15 vacant acres just weeks after acquiring the site for about $40 million. That project is under city review.

Duke has been on the march in the Bay Area in the past five years, pitching projects in Fremont, Oakland, Richmond and San Leandro in the East Bay and San Jose in the South Bay. It hasn’t shied away from challenging sites like a toxic East Oakland foundry it wants to replace with a 325,000-square-foot Class A industrial building. South San Jose is a different type of challenge: Attracting one or more tenants to a large development in a non-existent industrial market.

Duke is open to manufacturing and research companies occupying its Rue Ferrari project, it wrote in an earlier proposal submitted to the city in November 2020. The project is also suitable for distribution uses, as it fronts Highway 101 and is about a mile from on and off ramps to Highway 85. Moreover, some 2,900 homes have been built or are under construction across Highway 101 from the site of Duke’s development, part of a mixed-use village with 460,000 square feet of room for shops and commercial tenants.

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Duke Realty's Drew Hess and the Oakland site (LoopNet, Duke)
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