FREMONT — Seagate Technology has sold its vast tech campus in Fremont for hundreds of millions of dollars, although the high-tech firm also has struck a deal to lease the site it just unloaded — at least for now.
New York City-based Madison Capital and San Francisco-based Sixth Street, two investment firms that acted through affiliate MC Kato Realty, paid $260 million for the tech campus, according to documents filed on May 26 with the Alameda County Recorder’s Office.
Madison Capital also obtained a large amount of financing from three major lenders at the time of its purchase of the property from Seagate Technology, a top maker of disk drives for data storage.
Citi Real Estate Funding, UBS AG and Wells Fargo Bank teamed up to lend $172 million to Madison Capital, according to the public documents. The tech campus is the collateral for the loan.
The just-bought property is at 47488 Kato Road and is situated between two freeway interchanges that connect to busy Interstate 880.
This location could make the spacious property an attractive site for new development.
The dominant feature of the 30.3 acres Madison Capital bought is a vast office and research center totaling 411,000 square feet. A big chunk of vacant land is located on the east side of the building. Two large surface parking lots are located adjacent to the building.
It appears the Fremont property’s value has soared during the decade that Seagate owned the building.
In 2013, Seagate paid $90.3 million for the 30 acres. Seagate Tech bought the property through a bankruptcy proceeding that was launched in the wake of the cataclysmic collapse of Solyndra, a solar energy company that abruptly melted down despite a $535 million U.S. Department of Energy loan guarantee.
Soon after its $90 million purchase, Seagate said it would spend another $100 million to create a state-of-the-art tech center to help it invent a new generation of data storage devices.
Up to 600 people would be able to work at the brand-new tech complex, depending on demand for the company’s devices, Seagate estimated at the time.
In November 2022, however, Seagate revealed it had decided to cut 84 jobs at the Fremont tech center on Kato Road, official state documents show.
Madison Capital, the new owner of the Seagate complex, takes an active approach to its real estate purchases, according to a post on the real estate firm’s website.
“We acquire and reimagine office, retail, industrial, flex-industrial, laboratory and research and development assets to enrich spaces and create value,” Madison Capital states in a post on its site.
In June 2022, a Madison Capital affiliate paid $103.7 million for Ford Point in Richmond, a historic site perched on the waterfront where Ford Motor once manufactured vehicles.
Orton Development bought the crumbling Ford Point complex in 2004 from the city of Richmond and launched a massive redevelopment of the property, transforming the old auto factory into a tech and creative hub.
As for the Seagate campus in Fremont, it wasn’t immediately clear what Madison Capital’s strategy might be with that property. But it’s likely Madison Capital will take an active approach to the prime East Bay site.
“No matter the challenge, we procure, develop, and reposition investments into high-performing, high-impact places,” Madison Capital states on its website.
