While the market for office space in Solano County continues to be soft, deals for industrial and retail space -- including a large sale of Benicia warehouses -- are whittling away at high vacancy rates.

"We are seeing a significant increase in activity and deal flow from the prior two years," said Phil Garrett, managing partner of Colliers International's Fairfield office.

Industrial vacancy was 13.8 percent for Solano in the third quarter, and net absorption of space was 700,000 square feet in the first nine months of 2012, according to Colliers International.

One of the biggest 2012 Solano commercial real estate deals is the acquisition of 1.3 million square feet of industrial space in Benicia. Those 19 buildings and 9.9 acres of yard space -- in Benicia Commerce Center I and II on Stone and Getty roads and in Benicia Industrial Park on Industrial Court and Industrial Way -- were part of a 23.3 million-square-foot industrial portfolio Walton Street Capital purchased in California, Washington, Oregon and Texas in 2007 from CalWest Industrial Holdings.

IndCor Properties, a Chicago-based subsidiary of investment giant The Blackstone Group, LP (NYSE: BX), in June it acquired a West Coast portfolio of that size and now lists those Benicia properties in its portfolio. Chicago-based Walton Street Capital turned the portfolio over to a special servicer in early June as $2.45 billion in debt on it came due and was talking with Blackstone about acquiring the properties.

Solano’s industrial real estate market is on track for its strongest occupancy growth in more than five years, but the number of square feet involved in deals is has been lower, according to Garrick Brown, research director for Cassidy Turley. In the first half of this year, 430,000-plus more square feet were leased than put back on the market. Leases totaled 390,000 square feet in the second quarter of this year. That’s way down from 978,000 square feet of deals a year before, yet total occupancy actually fell by 346,000 square feet at that time.

“The big difference is that leasing activity at that time was dominated by space user consolidations, tenant renewals and relocations,” Mr. Brown said.

In the first half of this year, there have been several sizable industrial deals in Solano. Bebe Studio Realty, the real estate arm for the Bebe store chain, purchased 240,000 square feet of distribution space at 4901-4995 Industrial Way in Benicia in May, according to Colliers.

Fresh from its relocation from Benicia to 126,200 square feet in Fairfield early this year, TricorBraun WinePak expanded again, moving its Northern California distribution facility to a larger, automated distribution facility in Fairfield in January. The company leased a 126,200-square-foot former Meyer Corp. warehouse at 2280 Cordelia Road in Fairfield, . The wine division of St. Louis-based packaging supplier TricorBraun leased nearly 93,000 square feet at 5200 Watt Ct. in Fairfield.

TricorBraun WinePak acquired Trilogy Glass & Packaging of Santa Rosa in January.

Another large second-quarter lease came from another wine-related company. QX Warehouse leased 92,000 square feet at 2320 Cordelia Rd. in Fairfield.

Another big wine deal came in the first quarter, when bottle supplier Encore Glass’ leased 80,000 square feet at 577 and 589 Indiana St. in Benicia.

Air cargo logistics provider Nippon Express USA leased 44,280 square feet of warehouse space at 801 Chadbourne Rd. in Fairfield in June.

Also in Benicia, OnTrac, CI Actuation and S&S Supplies & Solutions, leased tens of thousands of square feet each.

Westfield Solano is part of an eight-property, $1.154 billion pending sale of “non-core” shopping centers across the country announced April 18.

Australia-based shopping center giant The Westfield Group included the 1.16 million-square-foot mall in Fairfield, located at the Travis Boulevard junction with Interstate 80, in a deal to sell majority interest in seven centers totaling 6.61 million square feet to an investment group led by Connecticut-based Starwood Capital Group. Westfield would retain 10 percent ownership. The sale closed in June. Starwood, which had more than $19 billion in assets under management at the end of last year, is forming a new retail property investment group for the portfolio.

Westfield Solano is the second-largest of the eight in the pending sale, following the 1.6 million-square-foot SouthPark mall in Cleveland, and gets 7.4 million visitors a year.

The 27-acre former General Mills plant with its 180,000 square feet of warehouses, office and mill buildings and grain towers along Vallejo's waterfront was sold to Vallejo Marine Terminal, LLC, on Oct. 1 for an undisclosed sum. The site at 790--800 Derr St. has been vacant for more than seven years. Seller California Cherokee Brooks Return LLC, controlled by Dickinson Financial Corp. of Kansas City, Mo., included a ground lease of about 10 acres of docks and piers from the city of Vallejo.

"We are very excited about the opportunity, as well as the local community’s response towards the re-creation of a historically maritime terminal usage of this property," a representative said. "The navigational location within Northern California will allow the facility to fill a true void in the intermodal transfer of commodities, and we strongly believe that revitalization of this waterfront will help to provide commercial stimulus for Vallejo’s rebound."