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Seagate Clean Room Facility Up for Sale

MILPITAS, CA-Seagate will vacate the 77,250-sf facility in October but is obligated to pay rent for the next three years.

By Brian K. Miller | Updated on August 17, 2008

MILPITAS, CA-A local family trust is marketing a 77,200-sf R&D building here with 66,000 sf of clean room. Located at 195 S. Milpitas Blvd., the facility is net leased to Seagate Technologies, a publicly traded manufacturer of hard disk drives that announced plans to close the “media manufacturing facility” in October a few months after signing a new five-year lease. Offers are due before the end of the month.

One of the listing brokers, Colliers SVP Andy Zighelboim tells GlobeSt.com that Seagate it would cost $2,500 per sf to replicate the existing improvements in Milpitas and is paying a below-market rent of $0.94 under a lease that it can – and presumably will – cancel after three years. “Current market rent is $1.35 per sf (NNN), so there’s a lot of intrinsic value, especially considering the high-end improvements,” Zighelboim says.

With a lot of clean energy tenants looking for clean room space right now, Zighelboim says bidders could include investors as well as clean-energy companies, possibly a company in the burgeoning solar photovoltaic sector or the medical device space because the reduced time-to-market could present a competitive advantage.

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