Summary:
Kuka Robotics was a private company founded in 1996 with its US headquarters in Michigan. It was a subsidiary of a German parent company that has been around for 127 years, founded in 1828. The parent company was worth $ 4.4 billion in 2022.
The Ivy Group’s CEO Tim Vi Tran helped Kuka Robotics to lease an industrial property in 2015 close to Tesla, when they planned to expand their West Coast presence. This case study shares insights about how the Ivy Group helped this commercial tenant reach their goals, by:
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“Kuka Robotics found us through Google search,” said Tim Vi Tran, SIOR, CCIM. “I then learned that Kuka was an international robotics company that provided manufacturing, sales, service, and training of robots. They had a sizable contract with Tesla at the time. Since their parent company was based in Germany, even though they had a US headquarters in Michigan, they wanted to have a presence in Fremont near Tesla. So they looked online for a Fremont based commercial REALTORS® who knew the local market and industrial properties, to help them find the right property to expand their west coast presence.
“And they selected us. We were thrilled. We wanted to help them reach their business goals. It was an honor to be able to work with a company like Kuka Robotics,” recalled Tim.
“As we always do when we start working with a new client, we first seek to really understand what they’re looking for. We started with a questionnaire. They told us everything they wanted, and then we worked off that questionnaire as a starting point. Our questionnaire helped us understand what was important to them. Combining our knowledge of the properties and the market, we figured out which properties would fit their needs. Then we honed in on a specific site that meets their requirements”, said Tim.
Through initial inquiries, Tim learned that Kuka Robotics was looking for an open format, single floor space, a large warehouse with a high ceiling to set up and test the robots, and to conduct training, sales, warehousing, and other business operational needs. The following three requirements were important for their business operations:
Tim led his team to research and survey the market, searching for properties that fit their needs. They concluded that Kuka needed a 6,500 to 11,000 square foot space. The Ivy Group presented a couple of options to the company, eventually honing in on a few properties that they liked. The one that Kuka really liked was off Kato Road at the Kato Business Center in Fremont. The Ivy Group found them the space they needed.
The Ivy Group made an LOI (“letter of intent”) offer on their behalf, then started negotiating and structuring the lease for Kuka Robotics.
“We know the City of Fremont very, very well. We had connections with the city staff and decision makers. Kuka got their zoning permits approved in a very short time,” said Tim proudly.
“We wanted to be able to help this company expand, and we had the right skill set with location, market knowledge, connections…everything.”
“Lease negotiation is more than just about pricing. It’s about looking at our client’s goals, how long they are going to be there, future plans, and if they will need the option to extend the lease. You have to understand the technicalities of the lease terms to help your client. You’ve got to factor all these in,” said Tim.
“A lot of times, people just look at the price and the terms – the most basic ones. There are many different factors or things that you can negotiate in a lease. You can pretty much negotiate anything in a lease, or else you’re leaving too much on the table. You need to leverage real estate knowledge to help your client,” Tim continued.
The Kuka negotiations included the base rent, the triple net, the terms of the lease – the annual increases, security deposit, prepaid rent, option to extend, and corporate guarantee that the landlord demanded.
A lot of times when a tenant signs a lease with the landlord, the landlord wants additional assurance that the tenant will stick around for the entire lease term, and, more importantly, pay rent on time for the term of the lease. With smaller mom and pop tenants, landlords are very cautious since a tenant may sign a lease under a legal entity like an LLC or a corporation, completely separated from any other assets.
If the business fails and that tenant files for bankruptcy protection, it can make the lease worthless. By signing a lease guarantee, the landlord could go after the tenant’s other assets, in addition to the security deposit.
“What we usually do is provide all the financials to the landlords. We got the financials from Kuka Robotics and presented them to the landlord’s agent. Kuka and its parent company were very strong financially. They’ve been around for over 100 years. With such a strong operating history the landlord shouldn’t have any concerns about the tenant walking away. The landlord actually waived that guarantee. A lot of times landlords are very hesitant to do that,” said Tim.
The Ivy Group was able to actually help them get a pretty favorable lease with an option to extend. The client was happy.
“As part of our added value, we introduced professional IT network experts to Kuka Robotics. Since their US headquarters was far away in Michigan, they needed to be able to connect all their IT servers and systems, so they could talk to each other at multiple locations throughout the country, including the new location in Fremont, CA. The IT guy was able to come in and did a fabulous job to help them connect all their VPNs and servers, so that they could all be on the same page with their headquarters in Michigan, their facilities in Mexico and LA, and everywhere throughout the country. One location might be very good at providing training. The other might be very good at manufacturing. So all those people needed to be able to communicate among themselves.
“They liked the vendors we recommended and hired them. The IT guys did a great job. And the client was very happy with it.”
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Much has happened to Kuka Robotics since 2015 when the Ivy Group completed the leasing assignment. Its robots were later installed at the Tesla factory instead of in a separate property. Kuka Robotics was sold to a Chinese organization in 2016. But the expertise and experience of the Ivy Group in serving robotics companies’ industrial real estate needs remain relevant today, tomorrow and in the future.
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When you need to sell, buy, or lease a commercial property, the Ivy Group is ready to help you reach your goals with more than 100 years of combined experience and expertise in real estate, investment, technology and engineering. Contact us with your next real estate needs.
Copyright ©️ 2025 by Tim Vi Tran, SIOR, CCIM. All rights reserved.
