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North Bay Business Journal

Monday, August 11, 2014, 6:55 am

Commercial Real Estate: Lowenberg buys 314,000sf of wine warehouses

Also: Cornerstone buys Bepex plant

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    21 Executive Way, Napa (credit: Cushman & Wakefield)

    Lowenberg Corp. expanded its North Bay industrial portfolio by 314,000 square feet with the purchase of two south Napa wine warehouses, including 21 Executive Way, shown here. (credit: Cushman & Wakefield)

    San Francisco-based real estate investor Lowenberg Corp., which has become among the North Bay’s largest industrial landlords, expanded that portfolio further with the purchase of nearly 314,000 square feet of wine warehouse space in south Napa.

    Jeff Quackenbush, Staff ReporterLowenberg bought 21 and 37 Executive Way, located at the junction of highways 12 and 29 and Airport Boulevard, from Sacramento-based Live Oak Equities, LLC, on July 8 for $29.5 million. The seller was part of the investment group that backed Panattoni Development in the project in 2005 and 2008.

    “My client was not looking to sell, but it was a good offer,” said Greg Dyer, an attorney representing the family entity.

    Trinchero Family EstatesSutter Home Winery occupies all the 163,000-square-foot 37 Executive building and 76,000 square feet of the 150,000-square-foot 21 Executive building, according to Cushman & Wakefield‘s Glen Dowling, who represented both sides of the deal. The other half of 21 Executive is taken up by Collotype Labels USA, which recently renewed its lease and occupied another 22,000 square feet.

    The purchase brings Lowenberg’s North Bay portfolio to about 1.6 million square feet in 18 buildings in Napa, Solano and, recently, Sonoma counties. The investor’s total holdings are approaching 5 million square feet.

    “This transaction is further evidence that the region’s industrial investment market is continuing to improve, particularly the North Bay submarket,” Mr. Dowling said. “The Napa County industrial market continues to be very strong, with steady demand and a vacancy rate currently at about 4 percent. Well-leased industrial product continues to draw the attention of savvy investors looking for a stable market with strong barriers to entry.”

    The south Napa industrial real estate market has been tightening as the wine industry gathers momentum, and little construction has been completed. However, the vacancy rate inched up at the mid-year point to the upper single digits with the completion of a smaller industrial project, according to Colliers International. One American Canyon project has around 300,000 square feet of wine warehouses under construction, and several hundred thousand square feet are poised to come out of the ground in the surrounding area.

    ***

    aerial view of the former Hosokawa Bepex plant in south Santa Rosa (credit: Cassidy Turley)

    Cornerstone Properties’ latest Sonoma County industrial property purchase was the 140,000-square-foot, 35-acre former Hosokawa Bepex plant in south Santa Rosa. (credit: Cassidy Turley)

    Petaluma-based commercial real estate investor Cornerstone Properties is creating a portfolio of industrial sites with the purchase of the former Hosokawa Bepex plant in south Santa Rosa.

    Cornerstone Properties II S, LLC, on Aug. 1 purchased the seven-building, 138,000-square-f0ot complex on 35.3 acres at 120–180 Todd Rd. from Todd Associates, LLC, made up of Los Gatos-based Kearny Ventures and Pacheco-based Bay Alarm’s real estate arm Balco Properties. The purchase price wasn’t disclosed.

    This purchase follows Cornerstone’s acquisition of a 124,337-square-foot warehouse at 975 Corporate Center Pkwy. in southwest Santa Rosa on June 18. The investment company has its sights on other industrial investment, renovation and redevelopment potential in the county.

    “We want to do more work with people who are making and creating in our community here,” said a principal of the company.

    The Todd Road property has about 19 acres of undeveloped land to the south. The previous owner had considered redeveloping all or parts of the property since before purchasing it.

    Industrial real estate has been an active market in Sonoma, Napa and Solano counties in recent quarters, part of a Bay Area and national trend.

    “There is a lot of velocity in the industrial market right now,” said Brian Foster, a Cassidy Turley agent who represented Cornerstone and along with Trevor Buck and Niels von Doepp of the same brokerage represented the seller. “Every industrial building we have on the market for sale or lease has multiple interested groups.”

    The day the transaction closed escrow there were two offers for the remaining 10,000 square feet of building space plus yard in the complex that’s immediately available, Mr. Foster said. One is a national moving company, and the other also is national but of in an undisclosed line of business.

    Also, three food companies based outside the North Bay are scouting Petaluma for 50,000–60,000-square-foot industrial locations.

    “The sun is shining in our market again,” he said.

    The Todd Road property is 85 percent occupied by 11 tenants, including Fairweather & Associates, Pace Supply, FlashCo, Valley Oak Landscaping, Valley Oak Landscaping, Volume Precision Glass and Cabco Cabinets.

    Cornerstone has been on a buying spree this year. It bought the nearly 54,000-square-foot vacant office building in east Santa Rosa in mid-June. In January, it purchased at auction 130,000 square feet in three of four office and industrial buildings in Westwind Business near Charles M. Schulz–Sonoma County Airport. On April 15, Cornerstone purchased the 58,000-square-foot downtown Santa Rosa office building with the publishing offices of Santa Rosa Press Democrat and the Business Journal.

    Todd Associates had purchased the property in September 2005. Minnesota-based Hosokawa Bepex, a division of Japan-based Hosokawa Micron, started shutting down its Santa Rosa operations in 2004. Hosokawa had acquired the plant in 1992, when it acquired Rietz Manufacturing. Rietz established the facility in 1951.

    ***

    Goodwill Industries of the Redwood Empire (707-523-0550, gire.org) purchased a 27,125-square-foot, Big 5 Sporting Goods–anchored retail and office building in Rohnert Park with plans to relocate its thrift store in the city to vacant space there this fall.

    Rohnert Park Big 5 Sporting Goods building (credit: Ryan Morita of Marcus & Millichap)

    Goodwill Industries of the Redwood Empire purchased this Rohnert Park building, anchored by Big 5 Sporting Goods with plans to move its thrift store in the city to 13,000 square feet of that building this year. (credit: Ryan Morita of Marcus & Millichap)

    The Santa Rosa-based chapter of the North American social-service organization bought 470 Rohnert Park Expy. W. from Maurice Friedman Trust on June 30 for $2.985 million. Goodwill had recently sold a retail condominium where its Rohnert Park store currently is located, at 6591 Commerce Blvd., according to Keegan & Coppin agent Dave Peterson, who represented Goodwill.

    “We are outgrowing the store located at Commerce Boulevard and have been looking for another location with better visibility and easier transportation for our employees, program participants and customers,” wrote Mark Ihde, president and CEO of the local Goodwill organization, on the its website. “The building on Expressway West offers many of the amenities we have been looking for in a new location.”

    Built in 1990, the 470 Rohnert Park Expy. W. building was expanded to add the retail space currently occupied by Big 5 and upstairs offices now used by Nu-Designs Web Marketing, according to Marcus & Millichap agent Ryan Morito, who represented the sellers. Goodwill plans to set up a 10,000-square-foot store in the 13,200 square feet of former Kings Office Supply space in the building.

    Goodwill’s new Rohnert Park location will have  a “clean, bright, inviting” retail atmosphere, according to the announcement. Goodwill stores also are training centers “to help people with barriers to employment learn the job skills needed to find and keep jobs,” it said.

    So far this year, the Redwood Empire group has opened two new stores. On Feb. 21, a 5,200-square-foot store opened at Canyon Corners shopping center at 110 W. American Canyon Rd. in American Canyon, followed in May by a 5,800-square feet location at 6450 Hembree Ln. in Shiloh Center in Windsor.

    ***

    The sales team for the 182-suite Vina Bello luxury timeshare resort in south Napa and affiliated facilities in the region are set to move out of on-site portable offices this fall and into an 8,390-square-foot office nearby.

    Parsippany, N.J.-based Wyndham Worldwide (NYSE: WYN), which operates that resort as well as Worldmark locations in Windsor and Nice, on June 23 leased that office space at 2700 Napa Valley Corporate Dr. The new office is set to open in October.

    “The facility will accommodate the 20 sales associates who have been working in a temporary structure but is also large enough to expand to include up to approximately 35 associates,” said Lindsay Graham, a spokeswoman for Wyndham Vacation Ownership. “The facility will also accommodate approximately five to seven Northern California associates who have been stationed at nearby resorts.”

    The sales team in Napa will be responsible for WorldMark by Wyndham locations in Windsor, San Francisco and Angels Camp; Club Wyndham locations in San Francisco (Canterbury) and Angels Camp; and Shell Vacations Club resorts The Donatello in San Francisco and Vino Bello.

    All these brands are part of Wyndham Vacation Ownership. It operates nearly 200 timeshare resorts United States, Canada, Mexico, the Caribbean and the South Pacific for about 907,000 owners. Wyndham Hotel Group has about 7,500 franchised hotels and 646,900 hotel rooms worldwide under brands such as Ramada, Days Inn, Super 8 and Travelodge.

    Steve Crocker and Brooks Pedder of Colliers International represented Wyndham in the Napa lease.

    ***

    G&C AutoBody (707-525-3520, gandcautobody.com) has set up an auxiliary repair shop in San Rafael — G&C’s third location in the city.

    “It is not a location open to the public but, rather, just additional space to work on and store cars,” said Shawn Crozat, chief operations officer.

    The Santa Rosa-based company leased 5,600 square feet of the 15,000-square-foot automotive repair and parts complex at 38 Gary Pl. at the southeast corner of the Highway 101–Interstate 580 interchange in San Rafael from Sutter Health Facility & Property Services on March 10.

    The facility has six repair bays and is staffed with three technicians. It opened in April.

    Sutter Health bought the occupied and vacant auto repair and supply properties at 20–38 Gary Pl. in December 2009 for $5.9 million.

    G&C now has 12 locations: three in San Rafael, two Santa Rosa (one is production-only) and one each in Ukiah, Windsor, Rohnert Park, Petaluma, Novato, Fairfield and Vacaville.

    Submit items for this column to Staff Writer Jeff Quackenbush, jquackenbush@busjrnl.com, 707-521-4256.

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