Monday, December 31, 2007

Flextronics Completes Sale Leaseback of 500,000 SF Industrial Complex in Silicon Valley

Commercial property News - December 28, 2007

Westcore Properties L.L.C. has snapped up a nine-structure manufacturing complex in Milpitas, Calif., owned by electronics manufacturing services provider Flextronics International USA Inc. Flextronics will stay put as the sole occupant of the buildings, which account for an aggregate 499,200 square feet of industrial space, under a 10-year lease agreement with the new owner.

Carrying addresses on Gibraltar Dr., the multi-structure complex occupies 33.5 acres in Silicon Valley's South 88 Corridor, less than nine miles from San Jose. Singapore-based Flextronics came into possession of the buildings, which average 15 years of age, when it acquired rival Solectron in a $3.6 billion deal earlier this year.

Westcore, which purchased the property through its Westcore Milpitas L.L.C. entity, relied on Bank of America for financing for the acquisition and turned to CPS/CORFAC International for representation in the deal; CPS/CORFAC also represented Flextronics. Specific terms of the sale and lease agreements have not been disclosed; however, the average asking rate for manufacturing space in Milpitas is $0.73 per-square-foot, triple-net, according to a third quarter report by real estate services firm NAI BT Commercial.

Flextronics' decision to leaseback the space as opposed to leasing elsewhere was a practical one, according to Dan Hollingsworth, senior vice president & principal with CPS/CORFAC. "These are nine individual buildings; that's a campus," Hollingsworth told CPN today. "To find a campus of 500,000 square feet--that you (typically) can't find." Sphere: Related Content

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