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North Bay Business Journal

Monday, June 16, 2014, 5:50 am

Commercial Real Estate: PB&J investors buy 120,000sf in Petaluma, Santa Rosa

Also: Oat Hill plant in AmCan sold for custom winery; Voodoo Lab expands

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    Jeff Quackenbush, Staff ReporterInvestors connected to the PB&J Acquisitions group that made a big commercial property portfolio play in Petaluma two years ago purchased 120,000 square feet of warehouse and office space in two Petaluma and Santa Rosa properties recently.


    A 30-year-old manufacturing plant atop Oat Hill in American Canyon recently sold to a custom winery developer. (courtesy of Coldwell Banker Commercial Brokers of the Valley)

    The investors are redeploying proceeds from sales of multifamily properties in San Francisco to North Bay commercial properties in Section 1031 exchanges in these deals, according to PB&J managing member Bill Sumski. PB&J and its affiliates own 1.2 million square feet of office, industrial and some retail space in the North Bay, two-thirds of which is in Sonoma County, he said.

    The largest of the two deals was the purchase of the two-building, nearly 85,600-square-f00t office and warehouse complex at 715 Southpoint Blvd. in east Petaluma, known for its prominent clocktower out front and a tenant for which Stephens Properties built it in 1988–1989, Northbay Drywall & Plastering. Stephens Family 1996 Trust sold the 5.9-acre property fronting on Highway 101 to 715 Southpoint, LLC, on May 1 for $8.75 million, or just over $102 a square foot, according to property records.

    The Sumski family and the Stephens family had done business together years ago and were comfortable with each other enought to make this deal happen, according to James Manley, a Keegan & Coppin Co., Inc./ONCOR International agent who has been working with the property off and on for more than two decades.

    The building had two vacancies at the time of sale — 10,000 square feet upstairs and 2,500 downstairs. Lagunitas Brewing is the largest tenant, using the property for storage. Others are Fresenius Medical Care, The Office Playground, Department of Motor Vehicles and Reynolds Battery Service.

    In the Fountaingrove business area of northeast Santa Rosa, Mr. Sumski’s father, Jack, a veteran Bay Area real estate developer, led the purchase of 34,000 square feet of small-office space in five buildings at 3400–3460 Mendocino Ave. and plans some cosmetic upgrades to the structure and environs, Bill Sumski said.

    In early May, 57 Taylor Enterprises, LLC, purchased the 3.2-acre property for $3.2 million, or roughly $92 a square foot, according to public records.

    The property was built in 1978 as apartments but not finished as such — kitchens weren’t installed, so the story goes — and the property was leased as offices, Mr. Sumski said. With its proximity across the street from Kaiser Permanente Santa Rosa Medical Center, the offices are home to family practitioners, other physicians and acupuncturists, as well as accountants, attorneys, a nail salon and other small businesses. At the time of sale, the property had 29 tenants and was more than 85 percent to 90 percent occupied, with suites mostly 800–1,200 square feet in size.

    “We like it, because it’s an office building that functions almost like an apartment building,” Mr. Sumski said. “If a tenant moves out, it’s not a big problem.”

    Upgrade plans include fixing deferred maintenance, replacing the prevalent ivy and drab colors with a modern look. “Yet we want to keep the nice, intimate woodsy feel that it has now,” Mr. Sumski said.

    ***

    Oat Hill has stood out not only for its rare American Canyon vista of southern Napa Valley but also for the 25,000-square-foot manufacturing plant that has graced the ridge for three decades. Bud Cain, an original booster for American Canyon’s incorporation and once head of the Napa Valley Economic Development Corp., built the plant as the new home for his Tribotech Corp. after relocating from Silicon Valley.

    After Mr. Cain’s death in 2007, the property has been marketed for sale by his daughter Linda Fisher. Originally for $12.6 million and most recently for just over $2.5 million. The final sale price wasn’t disclosed. Oat Hill Partners, Ltd., sold the property June 4 to Hofacket-Ward Family Trust, according to public records.

    Casidy Ward and Lynn Hofacket in 1990 purchased Hidden Ridge Vineyard on the Sonoma County side of the Mayacamas mountains and have 54 planted acres of cabernet sauvignon vines. They make about 4,500 cases of the Hidden Ridge brand annually at Bin to Bottle in Napa.

    The new owners of 100 Napa Junction Rd. plan to turn it into a custom winery capable of producing as much as several hundred thousand cases a year, depending on how wastewater is handled, according to Michael Crane of Napa Valley Land Brokers. He represented the buyers in the purchase.

    A benefit of the property is the greater flexibility for tasting and events with the commercial and industrial zoning than is possible in unincorporated Napa County, Mr. Crane said. Something also tapped by other American Canyon wine producers is more freedom in the percentage of grapes or wine that must come from the county.

    The Calistoga Beverage Company plant upvalley had been considered for custom crush, but the conversion of it to winemaking was deemed prohibitive, according to Michael Moffett of Coldwell Banker Commercial Brokers of the ValleyCathy D’Angelo Holmes and he represented Oat Hill Partners in the sale.

    ***

    Santa Rosa-based Voodoo Lab, which since 1986 has been designing and making electric guitar sound modification pedals and related accessories used by numerous recording artists, is expanding its local production capabilities.

    Owner Josh Fiden and Tracey Fisher bought a 16,000-square-foot former beverage distribution warehouse at 1901 Russell Ave. late last year and have been securing a city green light to use it for Voodoo Lab warehousing. The city would require a separate use permit for manufacturing there.

    The company currently has its production plant less than a quarter-mile away at 3165 Coffey Lane.

    Earlier this year, Mr. Fiden secured a $1.283 million Small Business Administration 7(a) loan through Wells Fargo Bank for the business.

    Mr. Fiden couldn’t be reached for comment on further plans for the new space.

    ***

    For more than three decades, Betty Lukens, Inc., has produced sets of colorful felt for teaching children Bible stories. At the end of May, Ms. Lukens sold the 8,769-square-foot plant and headquarters at 711 Portal St. in Cotati to Curtis & Patricia Lang Family Trust. The purchase price wasn’t disclosed.

    Production was relocated  to Southern California and the company is moving sales functions to a small nearby office, according to sources familiar with the sale. Ms. Lukens didn’t respond to inquiries for comment.

    The Langs run Dustron, Inc., doing business as Carson Manufacturing Co., currently based at 1300 Dynamic Way in Petaluma. The company specializes in production of products from vinyl and urethane plastic sheets, such as liners for water tanks and ponds for frost-protection, reclamation and irrigation, and covers to keep water off medical casting while bathing. In the 1970s, the product line expanded to include rotational casting, and commonly seen products are bumpers for marine docks and airport baggage-handling carts.

    The company dates back to 1887, when the Carson family was making leather gloves in San Francisco. It moved to the North Bay after the 1906 earthquake.

    Jim Sartain and Rhonda Deringer of Keegan & Coppin Co., Inc./ONCOR International represented Ms. Lukens in the sale.

    Send items to jquackenbush@busjrnl.com or 707-521-4256.

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