Ikea plans 646,000sf Napa Valley ship-to-home center with 200 jobs

Scandinavian furniture and home goods retailer Ikea, on Tuesday 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 early next year. It's one of two customer fulfillment centers Ikea leased recently, the other one opening in early 2018 in Baytown, Texas, east of Houston.

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 countries, 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. 'Our goal is to increase accessibility to the IKEA product selection, and these two fulfillment centers will help us meet the home furnishing needs of many American customers.'

For fiscal 2017, the Ikea Group, including INGKA Holding B.V and its controlled entities, reported a total retail sales of $40.2 billion (34.1 billion euros) on Oct. 10. Adjusted for currency impact, Ikea Group's retail sales increased by 3.8 percent over 12 months.

IKEA Group, the largest retailer in the IKEA franchise system, owns and operates 355 Ikea stores in 29 countries. During the year, the stores employed 149,000 and had 817 million customer visits, and Ikea.com had more than 2.1 billion visits.

The Ikea e-commerce-related lease in Napa Valley follows a deal e-tailing king Amazon made for a fulfillment center in northern Solano County this summer. Amazon leased newly completed 321,000-square-foot distribution center by Buzz Oates Companies at 300 Crocker Drive in Vacaville's Interchange Business Park.

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.

That one transaction sucked up a considerable amount of warehouse space in the already tight Napa–Solano industrial real estate market, according to local experts. Industrial vacancy plummeted in Napa County from 5.2 percent at the mid-year point in one deal, and only about 1.5 percent of the roughly 17 million square feet of significantly sized industrial spaces in the county are available for lease, according to Matt Bracco of brokerage JLL.

But hundreds of thousands of warehouse square feet are planned to be built in Napa and Solano counties in coming months. One example is Napa Logistics Park itself, planned for 2.9 million square feet in five buildings when done. The second phase, being readied for construction this coming spring, is 372,000-square-foot Building 5. It would have warehouse clear height — how high inventory can be stacked before reaching the roof — of 32 feet, 120 truck docks and four to eight grade-level doors.

Brooks Pedder of Cushman & Wakefield represented the building owners in the Ikea lease. Tony Beatty of JLL represented Ikea.