With over 800,000 square feet of warehouse and other industrial space completed in Solano and Napa counties in the first quarter of this year and nearly as much space under construction, to have the area’s vacancy rate virtually unchanged speaks to “strong demand” for industrial real estate there, according to new reports.

“Not only is there strong demand for new construction given the low vacancy rates in the region, but Solano and Napa counties still have available developable land, while most of the other Bay Area counties do not,” said a first-quarter report from Colliers International’s Fairfield office (colliers.com/fairfield).

The area’s office-space market has been slowly improving, with preleasing of what’s under construction, another Colliers report said.

The vacancy rate for industrial space in the adjacent North Bay counties was 6.2 percent of now 50.6 million square feet, basically unchanged from 6.1 percent at the end of last year after about 800,000 square feet of net absorption of space, Colliers estimated. That’s even after the completion early this year of 861,000 square feet in two sprawling distribution centers at Panattoni Development’s Gateway80 Business Park in Fairfield.

But those buildings already were spoken for months before completion. Chicago-based Berlin Packaging leased one of the 430,500-square-foot buildings to consolidate Northern California operations acquired with Bruni Glass and Diablo Valley Packaging. Fast-growing meals-to-your-door startup Blue Apron leased the other building as the New York-based company’s second Bay Area food-prep and distribution hub.

The food and beverage industry in Solano and the wine business in Napa Valley have been the long-term drivers of market activity, Colliers said. Solano has proximity to Wine Country, low cost of doing business, favorable manufacturing composition and positioning as a transportation hub for local, national and international businesses, the report noted.

About 780,000 square feet of industrial space is under construction in Solano and Napa counties, the report said. A big builder in Solano, Sacramento-based Buzz Oates Group of Companies is at work in Napa Valley, with a 120,080-square-foot cross-loading distribution center under construction at 10 Jim Oswalt Way in American Canyon. In the same city, ICC/Stravinski is building a high-tech 258,048-square-foot fulfillment center for WineDirect at 450 Green Island Road.

The industrial market in Napa and south is so tight that the vacancy rate is around 1 percent. American Canyon’s rate is 8.9 percent, virtually all in the 646,000-square-foot warehouse finished last summer at 1 Middleton Way in Napa Logistics Park.

Buzz Oates is nearly done with a 321,651-square-foot warehouse at 300 Crocker Drive in Vacaville Business Park, the report said.

Solano–Napa office vacancy was 15.1 percent of 5 million square feet, down from 15.4 percent at year-end after 14,000 square feet of net absorption during the quarter, Colliers’ latest office report said.

“This marks the eighth time in nine quarters that the rate has declined, though the declines have generally been gradual,” it said.

The two-county office market’s significant construction is Partnership Health Plan’s 101,000-square-foot class A building on Business Center Drive, according to the brokerage.

Jeff Quackenbush (jquackenbush@busjrnl.com, 707-521-4256) covers construction, commercial real estate and wine.