[caption id="attachment_89529" align="alignright" width="345"] Chris Neeb, Glen Dowling, Matt Bracco[/caption]
Thanks to significant leases and building sales in 2013, the business parks of southern Napa County have the lowest vacancy rates in more than 15 years.
With even more of such activity in adjacent Solano County to the east, both counties are now entering a period of record low vacancy. The overall industrial vacancy rate in Napa and Solano counties dropped for the eleventh consecutive quarter at the end of 2013. The combined fourth-quarter vacancy rate for both counties fell to 5.5 percent percent from 8.98 percent percent a year prior.
The industrial vacancy rate in Napa County dropped to 2.3 percent percent from 4.7 percent percent during the same time period. This is the lowest vacancy rate Napa County has experienced in more than a decade and a half. Overall, transaction volume picked up substantially with numerous significant deals completed in 2013. More companies have active requirements for space in the market.
There were also several significant lease transactions in Napa during 2013. DA VE Winery, or Ca'Momi Wines, expanded by 57,000 square feet, leasing additional space for wine production and storage space at 2545 Napa Valley Corporate Dr. Barry Callebaut expanded into the balance of their existing chocolate manufacturing facility at 1175 Commerce Blvd. in American Canyon, leasing an additional 51,863 square feet. Biagi Bros. Transportation & Warehousing leased 108,000 square feet at 700 Hanna Ct. and an additional 106,000 sf at 1166 Commerce in American Canyon.
Significant sales of the past 12 months included Lowenberg Corp.’s purchase of 2511, 2515, 2545 and 2557 Napa Valley Corporate Dr. in Napa, totaling over 238,000 square feet in four fully-leased warehouse buildings. Napa County acquired the former Dey Labs campus which is approximately 359,000 square feet. Approximately 150,000 square feet of the campus area will be used for the Napa County Health and Human Services, the remaining space will be available for lease. DBI Beverage purchased a 59,843 square foot warehouse building at 2449 S. Watney Way in Fairfield.
With the extremely low vacancy numbers in both Napa and Solano counties, several speculative warehouses are scheduled to be under construction in 2014.
In Napa County, Panattoni Development Co. has a 270,000-square-foot rail-served warehouse building in the planning stages and will also break ground this summer on phase 1 at Napa Airport Corporate Centre in American Canyon. The building is a 90,765 square feet warehouse building located on South Kelly Road. Dennis Paulley is completing a 103,000 square foot warehouse building located at 531 Technology Way in Napa, available for lease. Greenwood Business Park in Napa located on the corner of Devlin Road and Airport Boulevard is going to break ground this spring on warehouses totaling 226,044 and 78,731 square feet. ICC-Stravinsky Development is going to break ground this spring on two 150,000-square-foot warehouse buildings.
With the economy continuing to show signs of improvement, we expect continued demand and strong lease and sale activity in 2014. In both Napa and Solano counties, industrial vacancy rates should remain in the low-single digit range, with rental rates continuing to climb as a result. The new development projects recently completed or now underway will accommodate for the continued wine industry demand and organic growth from other industries in both Napa and Solano markets.