Plans to transform an aging Fremont tech complex into a modern industrial center are moving forward.
Texas-based developer Hines and investment managers Oaktree Capital Management LP secured a construction loan to build a 267,000-square-foot Class A advanced manufacturing and distribution center in Fremont. Construction on the joint-venture project will kick off early next year, according to CBRE who arranged the loan and will be handling the leasing of the site.
The modern industrial center will replace a three-building tech campus, Dixon Landing Research Park, at 49000-49090 Milmont Drive, which sits near the Tesla Motors vehicle factory. Hines purchased the campus in 2021 for $47 million. Details on the size of the loan or the total cost of the project were not available in time for publication.
“[A] new Class A industrial product of this size is rare in Silicon Valley given the high barriers to entry and lack of developable land,” said Shawn Hardy, Managing Director at Hines. “Milmont Industrial will be a next-generation industrial facility in a strategically located supply-constraint market. We expect high tenant demand given the project’s offering and infill location.”
The new industrial facility joins Fremont’s booming advanced manufacturing industry in one of the tightest industrial markets in Silicon Valley. Industrial vacancy in Fremont was 1.9% in the third quarter of this year, down from 2.5% in Q2 2023, per research from CBRE.
The city has a high concentration of advanced manufacturing users, particularly for electric vehicles and batteries. The new center, called Milmont Industrial, will join the Warm Springs District, known for its concentration of advanced manufacturing companies in tech, electric vehicles, clean technology and life sciences.
High interest rates and the economic environment has made it challenging to secure construction loans.
“Despite the headwinds in the macro capital markets, we were able to secure an accretive balance sheet bank construction loan,” said Mike Walker, executive vice president at CBRE. “The favorable financing execution is a testament to the top-tier sponsorship and the excellent property location.”
