Sonoma County: Longtime office, industrial real estate developers sell off holdings

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Hundreds of thousands of square feet of office and industrial properties have been changing hands in Sonoma County.

Local food, wine and beer companies are jumping after a dearth of new construction, and the newly legal cannabis industry has been staking out significant holdings in Santa Rosa. The following are significant deals in the past 12 months.

Simons & Woodard

Stony Point Lakes (70, 100, 110 and 120 Stony Point Road, 131 Stony Circle buildings A and B) and 3333 Mendocino Ave., Santa Rosa

Reno-based Basin Street Properties in January made a big expansion to its holdings of commercial property in Sonoma and Marin counties, buying seven Santa Rosa office buildings from a real estate investor and developer known for some of the area’s more prominent buildings. The purchase price wasn’t disclosed.

Basin Street’s Santa Rosa portfolio now exceeds 1 million square feet with the purchase of 337,360 square feet of space from Santa Rosa-based Simons & Woodard.

Architect Larry Simons, who turns 80 in May, has been designing and developing Sonoma County buildings for five decades. The sale was part of a winding down of the company he started as part of five-decade career in design and real estate development.

Cader Corporate Center

1460–1490 Cader Lane, Petaluma

The 260,000-square-foot Cader Corporate Center warehouse project is first major industrial-space project built in Petaluma in years when it went into construction in February 2016, when it was 58 percent preleased. Project owner MNCVAD-Ind Petaluma CA LLC, managed by New York Life Real Estate Investors and McMorgan & Company, purchased the 20.4-acre site from longtime Petaluma developer RNM Properties.

By the time it was completed around the beginning of this year, the three-building property was fully leased to four local companies: Scott Laboratories in 86,840 square feet, Hydrofarm in 80,000 square feet and Clover Sonoma Farms and Tomales Bay Foods (dba Cowgirl Creamery) in 94,000 square feet.

Hydrofarm signed its lease in November. Nick Egide of Meridian Commercial represented the hydroponics products maker and wholesaler, which now occupies 195,000 square feet in the city.

Infused with cash from a merger last May with Emmi, Tomales Bay Foods signed a 10-year lease for 30,000 square feet in July. Tony Sarno of JLL represented Tomales Bay Foods.

Steven Leonard of Cushman & Wakefield represented MNCVAD in the leases. Scott and Clover inked their deals in January 2016.

CannaCraft

Giffen Avenue and Lombardi Lane, and 2330 Circadian Way, Santa Rosa

As the major city on Highway 101 between California’s historically active cannabis-growing region of Mendocino, Humboldt and Trinity counties and the San Francisco Bay Area, Santa Rosa has become a focus for industrial and office real estate activity related to the state’s newly legalized industry. The May sale for $6.32 million of 150,000 square feet of former telecom-related industrial buildings on Giffen Avenue in southwest Santa Rosa to investment groups involved in cannabis testing, products, distribution and dispensaries.

The same group in April 2016 also leased 34,000 square feet of office and manufacturing space on Circadian Way.

Paul Schwartz of Terra Firma Global Partners represented the seller of the Giffen buildings. Dino D’Argenzio and Erlina Othman of Keegan & Coppin represented the new tenants of 2330 Circadian.

Victory Station

22801 Eighth St. E., Sonoma

Just over 19 acres at 22801 Eighth St. E. at the northwest corner of Highway 12 and Eighth Street East south of the city of Sonoma sold in April 2016 to a group led by a veteran North Bay developer of expansive North Bay warehouses.

VSP LLC bought the land from Sonoma Valley Business Park LLC for nearly $4 million. Fairfield-based McNeill Real Estate Services, which coordinated the Cader Corporate Center project in Petaluma, is leading development of this project, called Victory Station. It would have about 260,000 square feet of warehouse space in a concrete tiltup structure with 25 truck-dock doors and some office space.

The project cost is estimated to be about $30 million. Washington Capital Management has brought in investors to back the project.

Representing the seller was Rhonda Deringer, partner of Keegan & Coppin/ONCOR International and former president of seller Odyssey Development.

Fountaingrove Corporate Centre I

3510 Unocal Place, Santa Rosa

Petaluma-based The STG Group increased its Santa Rosa office portfolio with the December purchase of the 60,000-square-foot office building at 3510 Unocal Place in the Fountaingrove area. STG was one of five investors buying a 661,000-square-foot portfolio of Bay Area office buildings from Sleepy Hollow Investment Co. For $130 million all together. Cushman & Wakefield brokered the deal.

STG in May 2014 had purchased five Santa Rosa office buildings totaling about 168,000 square feet from longtime owner Sausalito-based Berg Holdings Corp. for $13 million.

Enclave at Adobe Creek

1 Lakeville Circle, Petaluma

The 492-unit Enclave at Adobe Creek apartment complex in Petaluma was the largest Sonoma County multifamily sale in the past 12 months. It was sold by an affiliate of Kennedy Wilson Holdings to an investment fund of Los Angeles-based JRK Property Holdings in July for $144.5 million, or nearly $294,000 a unit.

Kennedy Wilson’s entity had purchased the complex in February 2011 for $68 million, or about $138,000 a unit, and that was 15 months after it had previously sold for $52 million.

Russian River Brewing

Mitchell Lane, Windsor

Airport Business Center purchased land on Mitchell Avenue in Windsor then inked a build-to-suit deal with Russian River Brewing Co. for a 50,000-square-foot brewery and pub. The maker of Pliny the Elder brand that brings crowds each year to the downtown Santa Rosa brewpub for the limited release is building the brewing facility for expansion.

Shawn Johnson of Keegan & Coppin/ONCOR International represented Airport Business Center.

Labcon

Cader Lane, Petaluma

Petaluma-based Labcon North America in March purchased the last 12.5 acres of the RNM Properties North Bay portfolio, from which had come a number of buildings south of Lakeville Highway in Petaluma. Trevor Buck, Brian Foster and Steven Leonard of Cushman & Wakefield represented Labcon and seller RNM in the Cader Lane land sale.

Next door, Labcon is building a $5.5 million, 40,000-square-foot warehouse on the former Stero plant property purchased two years ago. The existing building was transformed into a Steris Health sterilization facility.

Grand Cru Custom Crush

1200 American Way, Windsor

Startup winery Grand Cru Custom Crush inked a build-to-suit deal with Airport Business Center for a 31,000 square foot production and hospitality facility off Conde Lane in Windsor. The project is set to start construction this spring and is scheduled to be ready to receive grapes in August.

Shawn Johnson of Keegan & Coppin/ONCOR International represented Airport Business Center.

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

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