A wave of major leasing and sales has kept ahead of big vacancies to keep vacancy rates in Napa and Solano counties falling, and the blossoming Napa retail market has brought with it a flurry of leases and pending property sales.
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Major recent deals in Napa and Solano countiesLeases
North Bay Distribution, 2050 Cessna Drive, Vacaville, 220,800sf
Updike Distribution Systems, 5200 Watt, Fairfield, 127,665sf
Royal Tencate, 2450 Cordelia, Fairfield, 64,861sf
DC Solar, 393 E. Channel, Benicia, 60,400sf
Synergy Glass Packaging, 393 E. Channel, Benicia, 48,000sf
Portocork America, 560 Technology Way, Napa, 42,000sf
G.L. Mezzetta Inc., 110 Mezzetta Ct., American Canyon, 29,000sfSales
5195 Fermi Drive, Fairfield, 607,208sf, distribution, $33.5 million
1100 Trancas St, Napa, 62,466sf, medical offices, $11.2 million
2901, 2955 Auto Mall Pkwy., Fairfield, two auto dealerships for Carmax, $12 million
Land in the Vaca Valley Business Park, Vacaville, for church and school, $4 million
8668 Sparling Land, Dixon, 30,000sf, industrial, $3.77 million
4610 Westamerica Dr, Fairfield, 10,000sf, office for Copart, $1.14 million
Michael Moffett of Coldwell Banker Commercial Brokers of the Valley in Napa said sales and leasing activity since the beginning of this year seems to suggest the local commercial property market is rising from a bottom reached in the past few years.
He likened the affect of the recent activity in bringing back sales prices and rental rates to a bouncing squash ball. "You don't get too high of a bounce, and you do not get too many bounces," he said. "Things are getting better, but it will be slow to get better. I don't think the ball will bounce too high for while."
The office vacancy rate inside the city limits of Napa, which in the past couple of years ranged between 16.5 percent and 18 percent for multitenant buildings larger than 5,000 square feet after the completion of The Riverfront, Main Street West and Napa Square mixed-use developments, has come down a few percentage points in recent months, Mr. Moffett said.
Those new properties have been filling up, and so have existing office buildings such as the nearly 27,000-square-foot Soscol Professional Plaza at 1700 Soscol Ave. The building has become 90 percent occupied after the property managers proactively improved a few suites for quick move-ins by newcomers such as Pacific Pain Management from St. Helena and accommodating expanding tenants, such as Star Staffing, which has been in the building for several years, according to Mr. Moffett, who markets the property.
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In the industrial real estate markets of Napa and Solano counties, more companies are asking to look at properties to lease, and those tours are turning into deals, according to Chris Neeb of Cushman & Wakefield.
"A lot of prospects in the last several years toured several times, but they did not turn into deals," he said. "These are real requirements."
While not "dramatically different," there is a noticeable increase in activity compared with a couple of years ago and even much of last year, Mr. Neeb said.
Industrial vacancy rates were estimated to be 12.3 percent in the south Napa business parks and 9.5 percent in the industrial are on the north side of American Canyon at the end of the first quarter and likely will be lower in both submarkets at the end of the second quarter and later this year, according to Cushman & Wakefield. Recent big leases include Portocork America's expansion to 42,000 square feet in Napa Valley Gateway Business Park, WineBid.com's lease of 26,000 square feet at 765 Skyway Ct. and G.L. Mezzetta's 29,000-square-foot storage expansion.