Longtime S.J. factory site bought by NYC developer

Big manufacturing plant property gets a new owner

SAN JOSE >> A long-time San Jose property where a veteran manufacturer has operated for decades has been bought by an East Coastbased development and real estate investment firm.

The factory, on 10th Street near Tully Road, has been purchased by an affiliate controlled by Clarion Partners, according to documents filed with the Santa Clara County Recorder’s Office.

LIT South 10th Street, the affiliate of Clarion Partners, paid $22 million for the factory building and the seven acres of land beneath it at 2250 South 10th

St. in San Jose, according to county records.

New York City-based Clarion Partners paid cash for the property, the public documents show.

Clarion is a real estate firm that arranges and manages an array of investments and property development projects on behalf of the company’s clients.

“With its ideal location near major airports and transportation arteries, the property offers convenient access to densely populated areas,” said Michael Marrone, a managing director with Clarion.

The seller was Burke Industries, according to the county records. The site is behind a Costco store at Senter Road and Burke Street.

Burke Industries manufactures rubber and plastic products used for roofs, liners and covers at its San Jose site. The company was founded in 1942 and operated for decades as a familyoperated business until the Burke family sold the enterprise to a Wall Street firm through a leveraged buyout.

“The company started out as a family business, in my grandfather’s basement, where the family made odds and ends,” said Michael Burke, who worked in the business alongside his father Norman Burke and his uncle Halsey Burke. “It was hard work but good pay. Working in the factory was hot, it was difficult, but it was worth it.”

Burke Industries, more than a decade after the family sold the business, filed for bankruptcy in 2001. The company emerged from bankruptcy in 2002.

In 2008, New Jerseybased Mannington Mills, a flooring company, acquired Burke Industries. Burke became a wholly-owned unit of Mannington Mills through the transaction but kept its brand name.

At the time, Mannington Mills saw the acquisition of Burke as a way to diversify its line of hard-surface commercial floors.

Mannington Mills has not responded to a request for comment.

In 2018, about a decade after buying Burke Industries, Mannington Mills embarked on a venture to construct a factory in Georgia that would produce flooring products.

The Georgia flooring factory built by Mannington removed a key line of products from the Burke factory in San Jose.

The Burke San Jose factory, as of 2019, began to primarily focus on manufacturing what it called environmental products and custom rubber products, Burke San Jose president Bob Pitman said at the time.

“The sale of the property doesn’t necessarily surprise me,” Michael Burke said. “The Santa Clara Valley is not overly friendly to heavy manufacturing, as far as the cost basis to make products goes.”

The San Jose factory is in an area that is deemed to contain prime spots for redevelopment and construction of modern industrial and logistics buildings.

In October 2020, Amazon.com Services paid $59.3 million for a 17.8-acre site about a mile away on South Seventh Street.

The just-purchased property appears to offer development opportunities for Clarion Partners.

“Overall, San Jose is unique as a distribution location,” Marrone said. “We feel confident in the longterm potential for future redevelopment.”

If and when the factory ceases operations, another significant chapter in American industry will come to a close.

Over the decades, Burke Industries produced countless flooring, roof, pool, and carpet products. Burke also manufacturing an array of specialized items.

Among the items: products to help U.S. Navy submarines run quietly and Orings for Titan III rockets launched from Vandenburg Air Force Base. Burke never produced any O-Rings for the space shuttles. The company has been awarded patents for multiple inventions.

“It was great to be able to walk into the factory and know that your father’s office was right there,” Burke said. “Now, part of my family’s history is going away, which is sad.”