Warehouse space is being built at a brisk pace in Solano County 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 of the San Francisco Bay area.
“We’re having, universally, the best market ever,” said Brooks Pedder, whose Cushman & Wakefield team brokers industrial and office deals in Solano and Napa counties.
One reason is the natural recovery of the economy and shrinking warehouse inventory along the Interstate 80 corridor in the East Bay as properties are redeveloped into higher-value residential properties, he said.
But driving growth for industrial real estate will be e-commerce, which has been a driving factor in a half-million square feet of Bay Area deals recently, according to Cushman & Wakefield. A large such deal is pending in Fairfield.
Key Solano projects are Panattoni Development Company’s million-square-foot Gateway80 Business Park in Fairfield and projects in Vacaville by Sacramento-based Buzz Oates Group of Companies.
Panattoni in April started site work for the 1.04 million-square-foot speculative Gateway80 Business Park project on 52.4 acres at 1 Cordelia Rd. In Fairfield, just east of the towering Anheuser-Busch brewery windmills along Interstate 80.
The three-warehouse development is the largest of 1.5 million square feet of industrial real estate projects set for construction in Solano this year, and the project is scheduled for completion and occupancy by year-end.
The corridor between the San Francisco Bay Area and Sacramento is “in desperate need of efficient, modern industrial buildings, such as the ones we will deliver here in Fairfield,” said Tim Schaedler, the Northern California partner for Newport Beach-based Panattoni Development.
The Gateway80 project will have two 430,500-square-foot buildings and one with 178,000 square feet. They all are being built to LEED standards. The warehouses will have 32- to 36-foot clear heights and 54- to 55-foot column spacing. The larger buildings will have 84 dock-high loading positions, and the smaller building 25 dock-high doors. The property will have 202 trailer parking spaces and 533 car spaces. Each building will have a 2,000-amp power supply, skylights and fire-suppression systems.
“This project is going up at the perfect time because we’re running out of product,” said Eric Dakin, senior project manager for Fairfield’s economic development division.
The vacancy rate for warehouse space in Fairfield is 1.5 percent, or 3 percent, when light-industrial and flex space is added, said Dakin, formerly a commercial real estate agent for Colliers International in the city.
Buzz Oates also broke ground last fall on a 92,568-square-foot production plant at 770 Chadbourne Rd. for Critelli, better known as The Olive Oil Factory. It makes wholesale olive oils and vinegars.
Craft beer maker Heretic Brewery bought the 24,000-square-foot building at 1052 Horizon Dr. it partly occupied and plans to expand into the rest of it. The addition also is set to have an expanded taproom serving food. Nearby, cheesemaker Formaggi Di Ferrante purchased an industrial condominium and plans to expand into organic products, add a tasting room and open a restaurant with a wood-fired oven.
“Our big incentive is how relatively business-friendly our city is,” Dakin said.
North Bay industrial real estate vacancy rates have been declining for several years, while demand is rising from distribution and manufacturing companies in the Bay Area, Sacramento and the Wine Country, according to the Gateway80 development and marketing team.
Commercial Real Estate Guide