Reuters - October 28, 2009
Overton Moore Properties (OMP), announced today that it has signed the largest warehouse/manufacturing lease that has been executed over the past 20 years in the San Francisco Bay Area with Solyndra, Inc. Headquartered in Fremont, CA, Solyndra designs and manufactures photovoltaic systems, comprised of panels and mounting hardware, for the commercial rooftop market and has a contractual backlog of over $ 2 billion. OMP and Solyndra signed a 12 year lease for the 506,490 square foot Page Technology Park, in Fremont, CA. “This is a great way to finish up 2009 with the leasing of Page Technology Park. This is terrific news for the market and we successfully executed our business plan for this asset,” noted Timur Tecimer, President & COO of Overton Moore Properties.
Although the specific terms of the lease were not disclosed, it is reported that the total value of the lease is in excess of 45 million dollars. Solyndra also has an option to acquire the property during part of the lease term. “OMP believed, as did we, that the heavy infrastructure and clear height along with the building’s size were very desirable attributes for the emerging cleantech segment of the market. Solyndra was always on the radar given their pipeline of business, but we had very detailed discussions with a number of other larger tenants as well. We still see opportunity in this sector,” notes Rob Shannon, CBRE.
Page Technology Park will be a back-end facility for Solyndra that will support the recently announced construction of its second solar panel manufacturing plant. Solyndra is the first company to receive a loan guaranteed by the U.S. Department of Energy under Title XVII of the Energy Policy Act of 2005.
OMP recently acquired the property in December 2008 from Hewlett- Packard (HP). The property was acquired when the capital markets were in a tailspin and when the commercial real state market had stalled. OMP was one of the few buyers in the marketplace that could actually close deals during the fourth quarter of 2008. OMP acquired the property in an all cash transaction with a six month lease back from HP. “We were very conservative in our underwriting and had a margin of safety with our downtime, free rent and rental rates,” noted Tecimer. OMP acquired the asset due to the acquisition price, unique features of the building infrastructure, lack of direct competition, freeway access and submarket location.
The property, built in 1982, consists of manufacturing, warehouse, labs, and office/work area representing 506,490 square feet on nearly 30 acres. OMP strongly believes in acquiring assets below replacement in exceptional infill locations. The property has substantial infrastructure in place including 21 kVA utility service, 100% air-conditioned facilities, epoxy-coated ESD concrete slab floors, overhead power distribution bars in the manufacturing area, emergency power, 25-28’ clear heights, fully calculated and ESFR sprinkler systems.
The acquisition by OMP in December 2008 was their first industrial acquisition in Northern California. OMP will continue to strategically acquire assets in Northern California as well as in other markets in Southern California, Arizona and Nevada. Assets that will be targeted include: vacant buildings, buildings with roll-over risk within the first two years, asset repositioning and re-development. OMP through its investment fund OMP Industrial III acquires industrial assets on an all cash basis.
OMP was represented by Rob Shannon, Joe Kelley and Ben Knight of CBRE and Greig Lagomarsino of Colliers International and Solyndra was represented by John Olenchalk of GVA Kidder Mathews.
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