Despite a tough economy, a development group's gamble has filled three big buildings at a research complex in Fremont, bringing hundreds of jobs to the city.
In September 2009, Asilomar Partners Milmont LLC paid an estimated $7.4 million to buy a three-building research-and-development campus totaling nearly 200,000 square feet. During the depths of the recession, it might have seemed like a foolhardy move to purchase an empty complex.
Less than a year later, Dixon Landing Research Park, located at 49000 Milmont Drive, is 100 percent leased to nine tenants.
The final deal came last week.
"We got the buildings at a low enough price that we were able to offer rents at below market," said Jason Peery, one of the principals in the realty partnership that owns the complex.
Asilomar asked 39 cents a square foot in rent. Rivals sought 50 cents a square foot.
"Word got around fast," Peery said. "It was like a mini gold rush to get in here."
Nine companies that employ an estimated 1,000 people, including Cleantech and Biogenex, have moved operations into the research park.
"Companies came here from all over the place," Peery said. "We caught lightning in a bottle with this property."
Two companies relocated from elsewhere in Fremont. Two came from Milpitas, two from Sunnyvale, one from San Jose, one from Hayward and one from San Ramon.
Jason Peery's father is real estate legend Richard Peery. Decades ago,
With Dixon Landing, Jason Peery and his partners in the Asilomar group got plenty of help from commercial realty brokerages such as GVA Kidder Matthews, CB Richard Ellis and Colliers International, which brought tenants to scout the project.
"Asilomar offered some really attractive lease rates," said Scott Prosser, a broker with CB Richard Ellis in San Jose. "From a deal-making standpoint, they were really nimble."
In October 2008, the buildings were listed for $25 million by a group of prior owners. By mid-2009 the asking price dropped to around $13 million. Asilomar would not disclose the price. However, Alameda County property records and estimates from brokers suggested the buying price was $7.4 million. That would represent a big discount from the prior asking prices.
"They were able to lead the market with their rental pricing," said Paul McManus, a Colliers broker. "The low price is really what got their project leased up so quickly."
The Asilomar partnership had previously bought research and office complexes in San Jose, Palo Alto and Mountain View. All were vacant at the time of the purchase. Like the one in Fremont, all are now 100 percent leased.
"This is one of the best turnarounds I've seen," Prosser said. "They brought it back to the market and aggressively chased tenants and lease deals."
Peery's group hungers for more projects to revive.
"We've been looking for other opportunities," Peery said. "But we haven't found something we like. We are going to be really patient."
Contact George Avalos at 925-977-8477.