Why Trammell Crow is Building 1M SF Spec in Silicon Valley
Trammell Crow and JV partner Principal Real Estate Investors announced this week that they've started construction on MidPoint@237, a massive office and industrial complex in North San Jose. We chatted this week with Trammell Crow principal Will Parker, who tells us why the timing is right for the spec development.
Will says the first phase of the project will include three Class-A spec advanced manufacturing buildings, totaling about 600k SF. All three will be built simultaneously and are scheduled to be complete in Q3 2016. Four Class-A office and R&D buildings (totaling about 400k SF) also are planned. Construction on those buildings should start early next year.
The market is very tight with low vacancy rates and little to no first-generation space available, Will tells us. He says the developers were seeing interest in the buildings from prospective tenants even before breaking ground, which was earlier than expected.
North San Jose has gained a lot of interest this year as the prime Silicon Valley markets remain tight, something expected to continue into next year. With big movers such as Apple grabbing up space in the area (which could lead to a 4.15M SF campus), it's likely more companies will gravitate to North San Jose.
Trammell Crow and Principal Real Estate purchased the 57-acre property (shown above) from Cisco Systems in 2013.
Will tells us the North San Jose spot is a core location where industrial inventory is being removed even as tenants are in need of large spaces that meet their needs. According to Trammell, MidPoint@237 is the only available advanced manufacturing site of its size in Silicon Valley.
Principal Real Estate assistant managing director Mike Benson says he expects a good reception for the project, as the market has been underserved for years.
The project site is near Highway 237 and minutes from Moffett Park and I-880. The buildings will include interiors to suit, 28-foot clear heights and significant power, and are designed to achieve LEED Silver certification.
Mayor Sam Liccardo says the project will provide needed facilities for companies that need full-scale production capabilities.