Construction hums along on Napa Valley warehouse space to meet demand from companies needing to store and move a large amount of North Coast wine and other goods coming into and going out from the San Francisco Bay area.
The second phase of the Greenwood Business Park warehouse project at the corner of Airport Boulevard and Devlin Road near Napa County Airport started construction in August, according to Brooks Pedder, whose Cushman & Wakefield team is marketing the project. The concrete slab has been poured on what is designed to be an 80,000-square-foot warehouse.
“That project had been in progress since 2005 mostly because of Army Corps and wetlands issues,” Pedder said. “Beringer worked on it for a long time and got a project approved, but it was voided when Beringer dropped the winery concept.”
San Diego-based IDS Real Estate Group purchased the 19.4-acre property earlier this summer reportedly for about $30 million. It is said to be the group’s first Northern California acquisition, coming soon after opening an investment office in San Francisco. IDS purchased the site from McMorgan Northern California Value Add Development Fund (MNCVAD-IND Greenwood CA), an investment fund comprised of Northern California trade union pension funds and led by New York Life Real Estate Investors and San Francisco-based McMorgan & Company.
The fund had acquired the full-entitled project in 2013 and spent about $20 million constructing a 226,000-square-foot warehouse last year. It was leased during construction to Windsor-based Vynapse LLC, part of Adams Wine Group and better known as the wine order fulfillment house Pack n’ Ship Direct.
Also in August, the hulking 644,000-square-foot first warehouse of Orchard Partners-Devco’s 218-acre Napa Logistics Park in American Canyon got the official occupancy go-ahead, Pedder said. For the past eight months, the whole building had been set to be leased to a fulfillment house, but that deal ultimately didn’t materialize recently, said Pedder, whose team also is marketing that project.
The second phase of the 218-acre industrial project is entitled and awaiting a go-ahead.
Up to this point, demand for big warehouse space in excess of new supply in Solano and Napa counties has been fueling the 1.36 million–1.49 million square feet currently being built there, according to Colliers International and JLL.
“From large warehouse investment sales to new speculative buildings being quickly leased, there are many indications of a strong and active market in Solano and Napa counties,” said Phil Garrett, executive managing director in Colliers’ Fairfield office.
The industrial vacancy rate for Solano and Napa counties declined in the second quarter to 6.2 percent of 49.5 million square feet, down from 6.6 percent in the first quarter, according to Colliers. Average asking monthly rental rates increased by 3 cents a square foot to 53 per square foot, on a triple-net basis.
The Napa Commerce Center project has 152,000 and 81,600-square-foot warehouses set to break ground next spring, according to Glen Dowling of JLL.
The Napa Airport Corporate Center project is seeking entitlements to break ground on two warehouses next spring, Dowling said. One would be a 254,000-square-foot cross-dock facility — items move from trucks on one side to trucks on the other — and the other would have 90,000 square feet.
Madera-based Stravinski Development Group, which has been building large warehouses in southern Napa Valley for more than two decades, has another local project ready to come out of the ground. The company, via affiliate SDG Green Island 258 LLC, recently purchased 10.79 acres at 450 and 520 Green Island Rd. In American Canyon. There is a proposal before the City of American Canyon to build a 258,000-square-foot warehouse there.
Commercial Real Estate Guide