Solyndra Inc. designs and manufactures panels and mounting hardware for solar photovoltaic systems installed on commercial rooftops. The former HP facility, built in 1982, will be used as back-end support for the company's new fabrication facility, which is under construction in Fremont thanks to a $535 million loan from the US Treasury and $198 million from a recent equity financing round led by Argonaut Private Equity. The company began construction in September. The facility is meant to help the company meet an order backlog totaling nearly $2 billion.
In January, local industry experts told GlobeSt.com that the space could be worth as much as $0.80 per square foot per month because with 90,000 square feet of mezzanine office space and lab space as well it was more than just a manufacturing facility, which rent for somewhere in the $0.50s per square foot, and wasn't fully R&D space, which would rent for something in the $0.90s per square foot. However, given Overton More's low cost basis and its want to lease the vacant facility, local sources tell GlobeSt.com it's not surprising for the negotiated rent to be in the $0.60s per square foot. At $0.66 per square foot, the deal value would be approximately $48 million.
Overton Moore chief executive Timur Tecimer tells GlobeSt.com that Solyndra has already taken possession of the property lease is scheduled to commence around the time it completes its second fabrication plant, which Solyndra tells GlobeSt.com is scheduled for early 2011. "We nailed our business plan," Tecimer tells GlobeSt. "We had two years of downtime written in."
The lease includes a tenant improvement allowance that Tecimer did not disclose. The allowance will be used for improvements to existing spaces as well as for specific capital improvements. On top of that, Tecimer says Solyndra will install additional improvements valued at more than $10 million.
It's a big win to lease any space in this market, let alone to lease a property of this size, according to local market experts. That said, Tecimer says the property had an advantage over other facilities because it came ready to use and was all under one roof with heavy infrastructure and a standard clear height.
"We had several other solar panel manufacturers and other clean energy companies looking at this property because of its infrastructure," he says. "Hopefully this will lead to other businesses making decisions."
Indeed, Rob Shannon, one of the CB Richard Ellis broker with the leasing assignment, says that while Solyndra was always on the radar given its pipeline of business "we had very detailed discussions with a number of other larger tenants as well. We still see opportunity in this sector."
Shannon co-listed the property with fellow CBRE brokers Joe Kelley and Ben Knight, and and Greig Lagomarsino of Colliers International. John Olenchalk of GVA Kidder Mathews represented Solyndra.
As of the third quarter, overall industrial vacancy in Hayward was 13%, or 5.2 million square feet, while the direct vacancy rate was approximately 10%, according to data from Cornish & Carey Commercial.
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