02.12.2021

First new multi-building industrial project in Morgan Hill in 20 years will soon break ground

Trammell Crow Butterfield Technology Park Morgan Hill‚Äč

One of five buildings, rendered, at the Butterfield 5 Technology Park in Morgan Hill. The 24-acre project is located west of Highway 101 at Butterfield and Sutter boulevards. Its five Class A industrial buildings would combine to offer 410,076 square feet if completed.
HPA ARCHITECTURE 

By Matthew Niksa – Commercial real estate reporter, Silicon Valley Business Journal Feb 10, 2021 Updated 2 hours ago Construction soon will begin in Morgan Hill on a five-building industrial project — and it's being built without any tenants in tow.

Trammell Crow Company and CBRE Global Investors will break ground later this month on the project, a Trammell Crow spokesperson said. Called "Butterfield 5 Technology Park," the five Class A industrial buildings will cover 410,076 square feet.

The city issued a building permit for the development on Tuesday. It is slated for completion during the first quarter of 2022.

John Lang, Morgan Hill's economic development manager, said that the technology park is the first clustered multi-building industrial project in Morgan Hill in at least 20 years. The park is located within the Morgan Hill Ranch Business Park master plan area, which spans 350 acres and is marketed as the fifth-largest business park in Silicon Valley.

The project "presents a great new investment in the industrial building stock for not only existing businesses in Morgan Hill to grow into but (to) provide opportunities for new business ventures like advanced manufacturing to see the benefits of having their operations in Morgan Hill," Lang said in an email.

Will Parker, principal of Trammell Crow's Northern California Business Unit, said in a Tuesday email statement that the development "addresses a unique segment of the market with its small- and medium-sized buildings.

Located 20 minutes from downtown San Jose and the heart of the Silicon Valley population center, Morgan Hill is now a part of the conversation for Silicon Valley tenants and positioned to compete for upcoming lease rollovers in the next 36 months,” Parker said in the statement.

Comprised of 24 acres, Butterfield 5 Technology Park is located west of Highway 101 at Butterfield and Sutter boulevards. Trammell Crow and CBRE Global Investors teamed up to buy the site for $13.94 million, or about $580,833 an acre, last August.

The city of Morgan Hill environmentally cleared up to 600,000 square feet of industrial development on the site before Trammell Crow and CBRE Global Investors acquired it from apartment owner Braddock and Logan. The land and its associated project are part of a 58-acre development that includes the 389-unit Morgan Hill Apartments project, a 3-acre park and an extension of Sutter Boulevard.

As of last March, the apartment proposal was reportedly moving forward but had not yet advanced to the construction phase.

The five buildings that Trammell Crow and CBRE Global Investors are developing range from 70,280 square feet to 91,738 square feet in size. All of them could be leased by one tenant or split between no more than two, according to Morgan Hill's project information page.

Executive vice presidents Rob Shannon and Chip Sutherland and senior vice president Brian Matteoni of CBRE's San Jose office are marketing the business park for lease. And although it is being developed on a speculative basis, Trammell Crow's Parker said that the company is encouraged by the market's desire for Class A industrial space.