Terreno Realty Pays $55M for Bay Area Industrial Property

3660 Thomas Road

Terreno Realty Corp. has expanded its industrial portfolio in the San Francisco Bay Area after its acquisition of an approximately 135,000-square-foot property in Santa Clara, Calif. The company acquired 3660 Thomas Road for $54.6 million from an undisclosed seller. According to CommercialEdge data, the previous owner was Marchese Properties.

The industrial distribution facility was built with 13 dock-high doors, five grade-level loading positions and parking spaces for 91 cars. According to Commercial Edge data, the property was developed in 1968 and has 40,000 square feet of laboratory space, as well as 2,150 square feet of retail space.

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The building is located on a 6.5-acre site next to the Montague Expressway, and has nearby access to U.S. Route 101 that connects tenants to San Francisco. The location also puts it within driving distance to the San Jose International Airport and the Port of Oakland. According to Terreno Realty, the property is fully leased to four tenants whose leases expire between 2022 and 2027.

Terreno Realty’s six-market strategy

Terreno Realty’s acquisition of 3660 Thomas Road is part of its six-market strategy, where the company focuses on six major coastal U.S. markets for its industrial acquisitions. Terreno Realty is only investing in the Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, D.C. markets.

In the Bay Area market, the company also acquired a 93,000-square-foot industrial distribution center in Oakland, Calif., for $23.8 million in September 2019. More recently, Terreno Realty acquired a 118,000-square-foot industrial property in Woodinville, Wash., that’s part of the Seattle metro market. For Terreno Realty, these six specific markets all have large and growing consumer populations, are near highly developed airport, seaport and highway infrastructure for easier distribution, and have significant barriers when it comes to developing similar properties.