Solano and southern Napa counties are known for cavernous distribution centers with a lot of inventory but relatively few workers. Then four huge buildings became home to upward of 2,000 workers.
And the city of Vallejo angled to attract thousands more workers via a bid to host Amazon’s secondary headquarters and, if that fails, a large commercial development.
“A number of (industrial space) users out there looking at Napa and Solano would bring more than the standard number of employees,” said Chris Neeb, part of the JLL real estate team marketing several large projects in the market.
Scandinavian furniture and home goods retailer Ikea, on Nov. 7 confirmed plans for a large Napa Valley fulfillment center, saying it will employ about 200.
Early next year, the Dutch company said it plans to start operations in a 646,000-square-foot distribution warehouse at 1 Middleton Way in American Canyon in Napa County. It’s one of two customer fulfillment centers Ikea leased recently, the other one opening in early 2018 in Texas.
The company said these centers are the first of a new focus on delivering to consumer items ordered online or bulky products purchased at its stores, 400-plus in 49 counties, including 45 in the U.S.
“As we expand across the country and grow our online presence, we want to ensure we have sufficient warehouse capacity to support the efficient and timely delivery and shipment of products to our customers,” said Lars Petersson, Ikea U.S. president, in a statement.
Ikea Group, the largest retailer in the Ikea franchise system, owns and operates 355 Ikea stores in 29 countries. American Canyon will be Ikea’s 10th California location, including eight stores and one regional distribution center. Bay Area stores are in Emeryville and East Palo Alto.
The Napa Valley building, leased in September, was completed last year at DivcoWest’s and Orchard Partners’s 218-acre Napa Logistics Park.
Blue Apron, one of the largest meal-kit-to-your-door startups in a $1.5 billion a year annual U.S. market, early this year planned to open a food-preparation and fulfillment center in a 430,000-square-foot distribution warehouse recently finished in Fairfield. It was expected to open in 2018. But the company in October amid job cuts and belt-tightening decided to market the entire building for sublease, after nearly $35 million in build-to-suit financing and $38.5 million in lease commitments through 2028, according to public records.
The center, at Gateway80 Business Park, was to be similar to a new 495,000-square-foot New Jersey facility and the one that was going into the just off Interstate 80 were to complement Blue Apron’s three existing fulfillment centers, including one in the East Bay. A month after the company went public in July, it closed an older New Jersey facility.
But the availability of that space already is attracting prospective subtenants, said Neeb, whose team markets the project. “The outlook is good for 2018,” he said. “We don’t have a big inventory of (commercial space) product.”
After reportedly considering the space Ikea leased in Napa Valley, e-tail giant Amazon settled on a new 321,933-square-foot state-of-the-art warehouse and distribution center at 300 Crocker Drive in Vacaville Business Park.
It’s the first North Bay distribution center for Amazon and a collection point for merchandise arriving from the Bay Area and Sacramento.
Amazon moved into the building in October. It has parking for up to 500 employees during the “surge” holiday rush period.
“Given the competition for warehouse space, we can’t build them fast enough, and the ones we do build are often leased before they are finished,” said Kevin Ramos, chief investment officer for Buzz Oates, the Sacramento-based developer and builder for 300 Crocker and 3.3 million square feet of warehouses in Fairfield and Vacaville. The buildings are 99 leased, and several more are in planning.
Factory_OS, a modular-home startup, in June announced a new manufacturing facility on Vallejo’s Mare Island.
It will manufacture modular multifamily housing in 250,000-square-foot Building 680. BluHomes had been making steel-framed, fold-out panelized single-family homes there since late 2011. This spring, BluHomes shifted production to plants outside the North Bay.
Part of Holliday Development of Oakland, Factory_OS landed its first order from Google’s parent, Alphabet Inc., to factory-build 300 modular apartments.
The facility is set to open around the end of 2017 and employ about 300.
There are more than 100 businesses on Mare Island, representing more than 2,400 full-time jobs and 3.5 million square feet of leased space. And there could be as many more jobs in the next few years.
This fall Vallejo submitted its proposal for Amazon’s HQ2. And in November, the city released a request for qualifications from developers for 157 acres on the north end of Mare Island. It would allow for up to 1.2 million square feet of commercial, office, retail or industrial space. Submissions are due March 30.
“We sent out the North Mare Island RFQ rather than waiting to hear back from Amazon,” said Ron Gerber, economic development manager. “The market is strong in the North Bay with respect to light-industrial space, and we do not want to forgo any near-term opportunities.”
Jeff Quackenbush (firstname.lastname@example.org, 707-521-4256) covers the wine business and commercial construction and real estate.