SF Biz Times: Why San Leandro has become a hotbed for makers
Why San Leandro has become a hotbed for makers
Industrial companies are flocking to the Gate in San Leandro, a refurbished auto plant that is growing a community of artists, tech companies and makers, and striving to be the East Bay’s answer to SoMa.
Craft beer maker Drake‘s, motion capture company PhaseSpace and Type A Machines, a maker of 3D printers, are among those leasing at the property, at 1933 Davis St.
Tenant interest has pushed the 230,000-square-foot Gate to more than 80 percent leased since launching in February 2014, said Todd Gooding, president of Portland-based ScanlanKemperBard Cos., the building’s landlord.
Companies have been attracted to San Leandro’s central Bay Area location and relatively affordable Bay Area rents. Lit San Leandro, a fiber-optic network with cables throughout the city, and the city’s access to highways, rail and the Port of Oakland have also made the site a draw, said Gooding.
“As manufacturers were being pushed out of the primary markets, San Leandro seemed like a natural place for them to go with the infrastructure that was offered,” he said.
Rents range from $15 to $18 per square foot at the Gate, up from $9 per square foot for deals signed last year, said Gooding. Those improvements are drawing new investors. Last week, Chicago-based WHI Real Estate Partners paid more than $20 million for a majority stake in the project. “This gave them a low risk way to dive into the Bay Area,” said Gooding.
The new investment will fund enhancements to the property’s exterior and creation of an 8,000-square-foot conference area that will host events. WHI’s new investment “gives us further fuel for upgrades and investments,” said Cheryl Edison of Edison International, who handles business development and “creative placemaking” at the Gate.
The Gate spans the second floor of the Westgate Center, a mall that includes big box retailers including Sports Authority and Home Depot. The structure was built in the late 1940s and operated as a factory for Plymouth, Dodge and Caterpillar, before being converted into retail.
ScanlanKemperBard acquired the property in 2004 for $45 million and sought to attract artistic and manufacturing tenants to the upper level with its rebranding last year and offering spaces ranging from 1,000 to 10,000 square feet.
“We had to come up with a strategy that allowed us to provide a sustainability to the tenant base upstairs,” said Gooding.
The Gate’s success comes amid a surge in San Leandro development. Next to the San Leandro BART station, affordable developer Bridge Housing broke ground last month on a 115-unit apartment building, and Westlake Development Partners is building a San Leandro Tech Campus with OSIsoft as its anchor tenant.
“The Gate serves as a model for the conversion of aging industrial buildings into something that is perfectly suited to today’s innovators,” said Pauline Russo Cutter, the mayor of San Leandro.
The project has become “a hub for startups, tech companies and artists,” she said. “The Gate is definitely bringing more interest to our city and helps to raise San Leandro’s profile as a great location for cutting-edge companies.”
Roland Li covers real estate and economic development
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