RK Logistics Leases 410 KSF in the Bay Area
- Mar 26, 2021
RK Logistics Group has expanded its presence in the state of California. The third-party logistics provider signed two leases, totaling 410,000 square feet, at two Newark, Calif., warehouses and expects to hire between 50 and 100 people for the expansion. Cushman & Wakefield represented the landlords, while Townsend Commercial Real Estate acted as brokers for the new tenant.
RK Logistics Group will occupy the entire building located at 6753 Mowry Ave., part of Mowry Business Center. The 269,000-square-foot warehouse and distribution center is owned by Link Logistics and was constructed in 1997. The Class A facility offers insulated ceilings, ESFR sprinklers, HVAC and a 0.8/1,000 parking ratio, CommercialEdge data shows. The new tenant recently signed a multi-year deal with Lam Research, to provide the semiconductor systems manufacturer with logistics services support. Lam Research is the second-largest manufacturer in the Bay Area, with 6,200 employees, as reported by San Francisco Business Times in 2020.
RK Logistics also fully leased one of the four buildings at the newly constructed Morton Commerce Center, located at 7375 Morton Ave. and owned by Overton Moore Properties. The 141,000-square-foot warehouse is set to house RK’s primary eCommerce and retail fulfillment operations. It offers 18 dock doors and two grade-level doors, ESFR sprinklers, 159 parking spaces and a roof capable of handling 100 percent solar capacity. Morton Commerce Center is situated on a 30-acre site and comprises 604,796 square feet of usable space. Currently, the only other tenant at the property is Facebook, which signed a 225,679-square-foot lease back in January 2019, San Francisco Business Times reported.
Both properties are within a 30-mile radius of major transportation hubs, interstates 880, 580, 680 and 280, three airports and the Port of Oakland. RK Logistics operates in Newark, Fremont, and Hayward, with close to one million square feet of warehousing and distribution capacity, including a certified, general purpose Foreign Trade Zone in the South Bay area.
Semiconductors in the spotlight
The current global health crisis negatively impacted logistics and transportation networks worldwide, as well as multiple other sectors. One such side effect is a massive shortage of semiconductors, which is driving up not only chip stocks, as MarketWatch pointed out, but is also expected to spur domestic development.
Case in point, Intel is investing $20 billion in two new Arizona factories, expected to create some 15,000 jobs in the long term. In December last year, Taiwanese manufacturer TSMC unveiled first plans for its upcoming $35 billion U.S. megaproject, also in Phoenix.
President Joe Biden signed an executive order this February, aiming to “address vulnerabilities in the supply chains of four key products”, a White House press release states. These four products are pharmaceuticals, semiconductors, critical minerals and large-capacity batteries.
Solid industrial fundamentals
Despite a troubled year overall, Silicon Valley’s industrial market remained strong through 2020 and is poised to grow even more this year. Gross absorption reached 4.8 million square feet by last year’s end, a growth of 5.6 percent from 2019, according to a Colliers report, mostly driven by growing demand in e-commerce and the life science sector.
Vacancy rose to 3 percent in 2020, a 30 basis point uptick over 2019, while asking rates remained virtually unchanged, the same report showed. One million square feet of industrial space was delivered in 2020, of which more than 91 percent was instantly absorbed, with preleasing activity setting the norm.