Industrial investor and developer CIP Real Estate LLC is continuing its recent acquisition push with the addition of a big business park in Northern California.
The Irvine-based company recently bought Clipper Court Commerce Center in Fremont for $103.5 million.
Located near the 880 Freeway and the San Francisco Bay in the master-planned Bayside complex, the property runs 352,280 square feet, and counts a mix of small and mid-bay industrial and flex units across 14 buildings.
The seller was commercial real estate investor Canyon Partners, which bought the property through a fund it manages for the California Public Employees’ Reitrement System.
The deal works out to a price of nearly $294 per square foot. “Due to zoning, lack of available land and very high construction costs, these types of small and mid-bay industrial parks cannot be reproduced in today’s environment in most markets across the country, but specifically in the Bay Area and Southern California,” CIP CEO Eric Smyth told the Business Journal via email.
“In fact, the cost to reproduce this park would be over $500 per square foot based on current construction and land costs,” Smyth added.
Clipper Court was 89% leased at the time of acquisition; tenants include chemical producer BASF Corp., compressed air and vacuum products maker Kaeser Compressors, electrical services company CTEMS and general trading company Hyundai Corp., a division of the South Korean automaker’s R&D program, Hyundai America Technical Center.
CIP plans to invest upward of $5 million in capital improvements to bring Clipper Court up to date.
Newmark brokered the deal for CIP. The acquisition was financed in part by J.P. Morgan Asset Management.
Busy 2022
The deal marks another investment in Fremont for CIP, which in 2019 paid a reported $30 million for another complex in the city.
The latest buy is one of its pricier deals following a record year of acquisition activity in 2022. Last year’s activity pushed its portfolio, now nearly 10 million square feet, past $1 billion in value.
Notable deals for the company last year included the company’s first entry into the Florida market. CIP paid $74.3 million for two business parks in East Tampa, totaling 405,772 square feet.
“Tampa is a very desirable market, and land parcels for this product type and size of park are becoming increasingly rare, due in part to lack of available land and local industrial zoning restrictions,” Smyth previously told the Business Journal.
CIP expects to secure another property in Tampa this month for $27.2 million, marking the company’s third acquisition in that market over the past nine months, Smyth said.
Construction Update
On the construction side, CIP in June delivered the first of two new industrial buildings in its existing 1.3 million-square-foot Gwinnett Commons complex in Georgia.
The recently completed 88,500-square-foot building, designed for distribution, was pre-leased by Hyundai L&C USA, a countertop distribution company not to be confused with Fountain Valley-based Hyundai Motor America.
Hyundai L&C is the North American subsidiary of Hyundai Department Store Group, which is based in South Korea.
The second 89,500-square-foot building, pre-leased by Walgreens, was under construction as of July. The “fully automated” distribution center is expected to be occupied in October, officials say.
CIP invested roughly $25 million for both projects at Gwinnett Commons, which were financed by Pinnacle Bank.
North Carolina
Another construction project for CIP got its start in June.
Whitehall Tech III, the third, 75,000-square-foot building in CIP’s 280,00-square-foot Whitehall Tech Center industrial park in North Carolina, offers 15-minute access to Charlotte Douglas International Airport.
The building is expected to be complete for tenant occupancy by first quarter next year.
The other two buildings in the complex are 100% leased, with 14 tenants.
Locally, CIP counts several Orange County industrial properties in Orange and Anaheim. Its last reported local investment was in 2016 when it paid $12 million for a 91,000-square-foot business park near Honda Center in Orange.
