Hines and Oaktree Capital Management have secured financing to build a 267,000-square-foot manufacturing and warehouse campus in Fremont.
A joint venture of the Houston-based developer and Los Angeles-based investor has landed a construction loan for the industrial campus at 49000-49090 Milmont Drive, the San Francisco Business Times reported. It would replace three tech buildings built in the 1980s.
The amount of the construction loan and plans for the new campus near the Tesla Motors plant were not disclosed.
Hines bought the 209,300-square-foot Dixon Landing Research Park in 2021 for $47 million, or $225 per square foot.
Construction of the Class A advanced manufacturing and distribution center, dubbed Milmont Industrial, will begin early next year, according to CBRE, which arranged the loan and will handle leasing.
“[A] new Class A industrial product of this size is rare in Silicon Valley given the high barriers to entry and lack of developable land,” Shawn Hardy, managing director at Hines, told the Business Times.
“We expect high tenant demand given the project’s offering and infill location.”
The industrial campus will join a booming advanced manufacturing industry in Fremont — now among the tightest industrial markets in Silicon Valley.
Industrial vacancy in Fremont was 1.9 percent in the third quarter, down from 2.5 from the prior period, according to CBRE.
The city has a high concentration of high-tech factories, especially for electric vehicles and batteries. The new center will be built in the Warm Springs District, known for its tech, EV, clean technology and life science companies.
But high interest rates and a challenging “economic environment” have made it tough to secure construction loans, according to the Business Times.
— Dana Bartholomew
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