Napa industrial, retail real estate strengthens

[caption id="attachment_48831" align="alignright" width="280" caption="A 107,000-square-foot warehouse nearing completion in south Napa has a tenant in advanced negotiations to lease up to 40,000 square feet. (Cushman & Wakefield photo)"][/caption]

NAPA -- Industrial real estate in southern Napa County is enjoying a resurgence of business activity in wine-related businesses, and retail real estate activity is picking up with major properties under construction or being considered for repositioning or redevelopment.

Of about 10.5 million square feet of industrial space in the southern Napa County business parks, 1.06 million square feet or 10.2 percent, was available for lease at the end of last year, according to estimates by Steve Crocker of commercial real estate brokerage Colliers International. That's up from 9.89 percent the third quarter, but the vacancy rate came down from 11.7 percent at the end of 2010.

"We're seeing some industrial square footage getting absorbed," said Steve Crocker of Colliers.

That's reflected in 252,000 more square feet of space coming off the market than being listed as available, according to Colliers.

Industrial property for lease is becoming less available for large blocks of warehouse space as well as for 15,000- to 25,000-square-foot warehouses with truck docks, according to Chris Neeb of brokerage Cushman & Wakefield.

"If a couple of more deals go through, the vacancy could be down to 6 (percent) to 7 percent, which is close to the peak in 2005--06," he said.

Activity also is picking up for 5,000- to 10,000-square-foot spaces -- a segment that had little demand in the past few years -- but there are ample options in the under-10,000-square-foot range, he said.

"Some companies are finally acting on (commercial space) requirements and feeling bullish about where the economy is going and capitalizing on good values for space," Mr. Neeb said.

Major deals reflected in this tightening of the industrial market are two large leases in American Canyon's Green Island Industrial Park in September. Boisset Family Estates relocated its wine warehousing from Benicia, leasing 80,000 square feet from ICC/Stravinski in the recently built 307,000-square-foot warehouse at 677 Hanna Dr. Groskopf Warehouse & Logistics' leased 60,000 square feet at 801 Hanna Dr., which had been vacant for more than a year, and has an option to lease the rest of the 150,000-square-foot building.

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