Scannell Properties buys 40 Petaluma riverfront acres, 182,000sf of industrial buildings
A Midwest developer with past experience of building large distribution warehouses in the North Bay is back with $46.5 million in investments in Petaluma commercial property.
Affiliates of Indianapolis-based Scannell Properties purchased two existing industrial buildings between Highway 101 and North McDowell Boulevard in April then nearly 40 acres of industrial-zoned land along the Petaluma River last month, according to brokers of the land deal and public records.
On May 28, Scannell Properties Number 388 LLC purchased 39.2 acres at 500 Hopper St. along the Petaluma River for $20.1 million from an affiliate of Silicon Valley-based Bay West Development, according to Cushman & Wakefield, which helped broker the land deal and public records. That works out to be almost $12 a square foot.
"We're not sure what we will be building out there, but we like the market," said Todd Berryhill, Scannell managing director for the San Francisco Bay Area. The company is working on Northern California projects in Napa, Sacramento, Newark, Livermore and Tracy, and it is looking also for properties to acquire. "We're always on the hunt."
Trevor Buck, executive director of Cushman & Wakefield's North Bay team and one of the agents in the deal, said the property attracted interest from developers of and investors in property types other than industrial.
“Scannell proved to be an ideal buyer for this sought-after property given their experience and knowledge of the local area, coupled with their close work with the city, ultimately putting themselves in the pole position to close on the property,” Buck said in the deal announced June 19.
The industrial real estate continues to have strong demand from investors and tenants nationwide, and the San Francisco Bay Area is one of the strongest markets, Buck told the Business Journal.
"What you see when you look around (Sonoma County), Napa and Richmond is a lack of available land," Buck said. "There are projects coming out of the ground, but they are preleased or leased when they are completed."
Sonoma County only has a few active industrial projects, Buck said. In addition to a project in early stages in Rohnert Park are developments seeking approval in that city by PB&J Acquisitions and New York Life. PB&J is seeking approvals for 25,000 and 70,000 buildings on land purchased next to The Press Democrat's printing plant, and New York Life is seeking a green light to build about 180,000 square feet on adjacent land.
In the business parks around Sonoma County airport north of Santa Rosa, Airport Business Center and other investors have speculative industrial projects in the offing.
On April 15, Scannell Properties No. 375 LLC bought two light-industrial and warehouse buildings on Southpoint Boulevard on the east side of Highway 101 for $26.9 million, according to public records. The 755 Southpoint building has 88,466 square feet and 775 Southpoint, 93,500 square feet, Cushman & Wakefield marketing materials said. The sale price works out to about $145 a square foot.
The seller of the buildings was Sandy Bay LLC, an affiliate of Sistema US, which started in Novato in 2008 as a distributor of clamp-close food containers for New Zealand-based Sistema Plastics. The distributorship moved to Petaluma after the purchase of the Southpoint buildings in 2013.
Newell Brands, whose portfolio includes Paper Mate, Sharpie, Rubbermaid and Rohnert Park-based Marmot, picked up Sistema Plastics in late 2016 for $660 million. Sistema product distribution was consolidated with Rubbermaid's, according to Buck.
New tenants in about 45,000 square feet of 775 Southpoint are 1st Choice Delivery and The Yerba Mate Company, which Sebastopol-based Guayaki launched to take distribution of its ready-to-drink teas in house, Buck said. A lease for the remainder of the building is in final stages of the contract, he said.
1st Choice Delivery was launched in November 2017 by Minnesota private-equity firm Northern Pacific Group as a cross-town, same-day parcel and large shipment courier with the acquisition of 1st Choice Delivery of St. Louis and 4SameDay in El Segundo, California. It has hubs in Illinois, Kansas, Missouri, and California. It has eight service centers in the Golden State, mostly in Southern California. The first Bay Area location was Union City.
The company is temporarily occupying part of 755 Southpoint while its space in the other building is being completed, Buck said. Two tenants are in negotiations for space in 755 Southpoint.
Meanwhile, Scannell is upgrading the exteriors and grounds of the Southpoint complex, with paint, paving and landscaping, Buck said.