Silicon Valley’s Largest Industrial Project Lands $120M Loan

Hines has scored financing to plow ahead with its Edenvale Industrial Park in San Jose, the largest industrial development in Silicon Valley.

The firm landed $120 million in financing from Affinius Capital, the lender announced this week. The Affinius loan appears to be in addition to a nearly $100 million senior loan from Bank OZK, which was originated in June, records show. A representative for Affinius declined to comment further, while Bank OZK did not immediately respond to a request for comment.

Terms of the loans were not disclosed.

The 45-acre, 635,000-square-foot project is the largest industrial development in Silicon Valley and construction is already underway, according to CBRE, the brokerage marketing the property for lease.

The Edenvale project is expected to finish construction in June 2025 but it is not yet pre-leased, according to a CBRE representative.

The property can be used by both warehouse and advanced manufacturing tenants, Affinius Capital’s Eric Cohen said in a statement.

Bank OZK has a history with Hines, last year providing a $220 million construction loan for the developer’s mixed-use project in Fort Lauderdale, Florida.

Affinius Capital is the rebrand of a decades-long partnership between investor USAA Real Estate and lender and financier Square Mile Capital.

Construction finance has become difficult in the higher-interest-rate economy and there is limited new industrial supply on its way in the Bay Area, especially for Class A properties over 50,000 square feet that are typically utilized by advanced manufacturing groups like robotics, automation, cars and tech. Less than half a million square feet were delivered to Silicon Valley in 2023, according to CBRE research, though there was about 1.2 million square feet under construction by the first quarter of this year. That’s only about 1 percent of the total market supply.

The Edenvale development “will provide occupiers much-needed inventory in one of the lowest industrial vacancy markets in the western U.S.,” said Brian Matteoni at CBRE, who is leading the leasing team with Chip Sutherland.

Lack of power in older properties has been particularly problematic for tenants, according to CBRE. Edenvale’s three buildings at 550-650 Piercy Road right off Highway 101 will have a minimum of 4,000 amps, as well as 36-foot clear heights, dock-grade loading and “market-ready” offices.

Hines put together the land for the project over multiple purchases, according to public records, starting with a nearly 30-acre parcel that it bought from iPhone maker Foxconn in 2021 for just over $62 million. In June 2022 it added a 9-acre parcel it bought for nearly $20 million. The last piece was a nearly 7-acre site it added in June 2023 for just over $15 million.