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FREMONT, CA-A joint venture of TMG Partners of San Francisco and JER Partners of McLean, VA has added to its holdings within Bayside Technology Park in Fremont. The duo last week acquired 425,000 sf of R&D space in five buildings. The space is fully leased to Boston Scientific, Mattson, Themis Computer and Lexar Media.
Last September, the duo acquired 1.02 million sf in the park that was 60% leased. The purchase price was between $120 and $130 per sf, according to local sources, which equates to between $122.5 million and $133.5 million. In March, after inking a 94,500-sf lease deal with Asyst Technologies, the company retraded 315,000 sf of fully leased space to Legacy Partners for approximately $60 million, or $190.50 per sf, according to local sources.
The remaining 665,000 sf from TMG's original Bayside acquisition is about 45% leased. TMG's director of acquisitions Matt Field declined to comment on sale or acquisition prices but says last week's acquisition will boost the average occupancy of its portfolio, allowing the company to increase its leverage and return additional equity to investors. "We're in the process of refinancing it now," he says.
The higher leverage means the company will not be pressured to sell any time soon. "Our hold period is three to seven years depending on demand," says Field.
Most of the buildings in the TMG/JER Bayside portfolio were completed around 1990. Including the Asyst deal, there has been about 180,000 sf of leasing activity in the park since the initial acquisition. About 190,000 sf of the remaining availability is in the three adjacent vacant buildings that Field says set up well as a mini campus because it includes both cafeteria and daycare space. The triple-net asking lease rate is about $1 per sf per month.
"We're seeing increased touring activity and we have a number of prospects looking at whole buildings or multiple buildings," he says.
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