Call it the Tesla effect: Another supplier has moved out of the automaker’s factory, leasing space nearby as growth continues for the electric car company.
Toyota Tsusho America Inc., or TAI, this month inked a five-year lease for 64,396 square feet of warehouse space at a Prologis-owned complex at 41470 Boyce Road in Fremont. The company has been working inside Tesla’s Fremont factory since 2010, but Tesla has been expanding its own production use inside the facility, sending suppliers like TAI searching for their own space. In May, my colleagueBlanca Torres wrote about Futuris Automotive Inc., another Tesla supplier,inking a deal for 160,000 square feet in Newark.
Yet tenants like TAI and Futuris are finding it tough to find the right space, said Craig Leiker, an executive vice president atKidder Matthews who represented the tenant with colleague James Viso, a senior associate. The landlord was represented by Joe Kelly of CBRE.
“It’s a very tight market for warehouse and industrial,” Leiker told me. “The market vacancy is about 6.7 percent, and Prologis’s vacancy factor is less than 2.”
Leiker said the site met the company’s needs because it was close to the factory and had the right number of truck doors, high ceilings and enough warehouse space. The lease represents an increase for TAI, which is going from about 18,000 square feet to 64,000 square feet. TAI will use the space mostly for warehouse as well as some wheel assembly.
The deal is good news for developers of industrial and warehouse space, who are finally building new projects for the first time in years. Read more about that trend here.