A California investor has purchased a former Men’s Wearhouse office complex in a popular East Bay industrial market that the broker marketed as a possible conversion to warehouse uses.
Dollinger Properties, based in Redwood City, paid $23.4 million, or $200 per square foot, for a three-building office park at 6100 Stevenson Blvd. in Fremont, California, according to documents filed with Alameda County. The seller of the vacant, 117,000-square-foot property was Tailored Brands, parent of Men's Wearhouse.
“Although the property has been utilized as office for the last decade, it is situated on I-T [industrial] zoned land, which generated substantial interest among local investors, and ultimately allowed Northmarq to maximize proceeds for The Men’s Wearhouse,” Chase Dominguez, an associate vice president at Northmarq who represented the seller, said in a statement.
Dominguez added that “this versatility creates an opportunity for the buyer to reposition the asset and capture evolving demands of the market.”
The move comes as some office buildings are getting marketed as other uses because of lower demand for whitecollar workspaces as a result of remote working and company cost reductions.
Dollinger did not immediately respond to a request for a comment about its plans for the property.
Industrial assets have held more of their value than their office counterparts in Fremont and the greater East Bay market, William Austin, director of market analytics at CoStar, said in an email.
The new ownership group is “well positioned to capitalize on significantly stronger industrial demand," Austin said.
The "severely reduced value of office assets allows for lower purchase prices and can be converted into traditional industrial assets relatively cheaply,” Austin said.
Fremont’s industrial market has a vacancy rate of 4.7%, unchanged from this time last year, according to CoStar data. The office market’s vacancy rate has jumped 8.7% from 2.1%, CoStar data show.
Once a cluster of industrial buildings, the Fremont property was converted into an office for Men's Warehouse 10 years ago.