Huge East Bay buildings that include Tesla operations are bought
08/31/2023 07:30 AM
LIVERMORE — Three huge Livermore buildings whose tenants include Tesla have been bought in a deal that tops $300 million, a sign that some Bay Area real estate sectors remain sturdy. A veteran real estate buyer bought the buildings as part of its purchase of a vast portfolio of industrial sites totaling 3.5 million square feet in three California locations including Livermore. In Livermore, Westcore, acting through an affiliate, paid slightly under $326.8 million for the trio of East Bay industrial and logistics buildings, according to documents filed on Aug. 29 at the Alameda County Recorder’s Office. 801 Challenger Street in Livermore, an industrial building totaling 294,900 square feet whose tenant is Draexlmaier Automotive of America. (Google Maps) Together, the three Livermore buildings total just under 1.3 million square feet, according to posts on commercial property websites Compstak and PropertyShark. Here are some key details of the three Livermore buildings, which accommodate varying combinations of industrial and logistics operations: — 201 Discovery Drive, totaling 635,500 square feet. Tesla is the tenant. — 800 Atlantis Street, 367,700 square feet. Tesla rents the building. — 801 Challenger Street, totaling 294,900 square feet. Draexlmaier Automotive Of America leased the building for a manufacturing operation, the company said when the plant opened in 2017. 800 Atlantis Street in Livermore, an industrial building totaling 367,700 square feet whose tenant is Tesla. (Google Maps) “We are very excited to acquire such excellent quality product in a great infill market such as Livermore,” said Peter Mette, a Westcore managing director who oversees the real estate firm’s acquisitions efforts in Northern California. The just-completed purchase of the Livermore buildings points to rising property values for the trio of industrial sites, according to documents on file with the Alameda County Assessor’s Office. As of late June 2023, the buildings boasted a combined assessed value of $154.3 million, county records show. The buildings comprise Oaks Logistics Center. A joint venture of two real estate firms, New York City-based BentallGreenOak and Maryland-based NewTower Trust Co., sold the Livermore buildings to Westcore, county and state public documents show. “We are excited to welcome both Tesla and Draexlmaier Automotive to our growing portfolio and look forward to an enduring relationship with both tenants,” Mette said. By virtually all accounts, the office market in the Bay Area is in feeble condition in the wake of the government-imposed business lockdowns that began in 2020 to combat the spread of the deadly corononavirus. The lockdowns, in turn, chased away countless workers from their offices. Even after the shutdowns ended and the economic effects of the coronavirus faded, office workers stayed away from their formal workplaces and operated from home or other remote locations. Related Articles Real Estate | It's not just crime: What's really going on with San Francisco's shrinking retail district Real Estate | Big San Jose apartment complex includes affordable homes Real Estate | ‘Trash bag’ historic San Jose church is now visible again Real Estate | Move over, San Francisco: The suburbs of Silicon Valley are calling Real Estate | Apple-leased Silicon Valley office building is bought as value jumps Even worse, tech companies launched wide-ranging layoffs after they discovered they had over-hired to meet surging demand for remote services, technologies and equipment during the coronavirus. Tech firms also trimmed the size of their office operations to match their smaller staffing levels. Despite upheaval for the office market — which has unleashed sky-high vacancy rates in San Francisco, Oakland and San Jose that are at record levels — some commercial real estate sectors have remained robust. The relatively healthy commercial real estate sectors include spaces to serve industrial, logistics and advanced manufacturing operations that oblige employees to work on-site rather than remotely. This dynamic appears to be what enticed Westcore to buy the Livermore buildings and the rest of the industrial portfolio it just purchased. “Westcore is bullish about the fundamentals for industrial real estate,” said Don Ankeny, Westcore’s chief executive officer. “This strategic investment underscores our commitment to expanding our footprint in growth markets across the United States.”