DCT® Featured on The Registry: DCT Buys Industrial Building in Hayward for $11.1MM
An Article on The Registry by Jon Peterson
DCT Buys Industrial Building in Hayward for $11.1MM
NORTHERN CALIFORNIA – Denver-based DCT Industrial Trust has paid $11.1 million to acquire a 73,000 square foot industrial building in Hayward located at 3536 Arden Road, as stated by the public REIT in its second quarter 2017 earnings report. The per square foot price paid for the building comes to just over $152.
The seller of the property and the current tenant in the building is Prince of Peace Enterprises, according to sources familiar with the transaction. This company uses the property in Hayward as its corporate headquarters. It specializes in the marketing, importing and distribution of gourmet products, beverages, dietary supplements, natural OTC topical analgesics, herbal products and teas. The firm needed to find larger space to keep up with its growth needs, which led to the sale of the asset.
DCT expects to achieve a year-one cash yield of 5.1 percent on this investment. This return does not include six months of free rent that was placed into the transaction. The seller of the property structured the sale as a sale/leaseback deal. It calls for this company to remain in the property for multiple years, and this is where the free rent is coming from.
“We think that this property is a good building in a strong market, and we believe that there will be good demand for the space once the current tenants decides to move out of the building,” says David Haugen, a senior vice president with DCT. He works out of the company’s regional office in Emeryville and oversees the company’s buying, selling and leasing of industrial assets in Northern California.
DCT was represented in its purchase by the Oakland office of Lee & Associates. The individual working on the transaction was Jesse Lucas, a principal with the firm.
DCT thinks that the Hayward industrial market continues to show off very strong market fundamentals. “Average asking rents over the past year have increased by 16 percent. On a year-to-year basis average asking rents have increased by 10 percent, said Haugen.Back to all stories