Napa-Solano office, industrial real estate market tightens further as big projects near construction

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North Bay commercial real estate market reports

Read more insights from experts in various product types and areas in Sonoma, Solano, Marin and Napa counties:

The Napa Valley boasted a solid year across all product types in 2018. Although the market did experience a little choppiness toward the end of 2018 with some mixed national and global economic news, it picked up again in the first quarter.

A few noteworthy retail, industrial, and office projects broke ground in 2018 to accommodate this positive ongoing market activity. The Wiseman Company completed construction on a 21,000-square-foot, three-story “class A” office-retail building at 1300 Main St. in downtown Napa, with strong leasing activity there. Just south at Imola Avenue and Gasser Drive off Soscol Avenue, Fairfield Residential is constructing a 282-apartment complex. Also there, the Gasser Foundation is pushing forward with additional commercial and retail space, and a hotel developer is going to construct 141 hotel rooms.

South of the city and just below the iconic Grape Crusher statue in Napa Valley Commons, Pacific Hospitality Group just completed the 145-room Vista Collina Resort addition to The Meritage hotel, featuring nine wine tasting rooms. These new amenities will keep upward pressure on asking rental rates, not only for retail space but also for office and industrial space in surrounding business parks.


The Napa office inventory totals just shy of 2 million square feet, stretching from the airport area north to St. Helena. While the downtown Napa submarket remains tight for space, vacancy creeped up over the 12 months to just under 6.8 percent from around 4 percent. Contributing factors include recent new buildings to the market, with the completion of 1300 Main, First Street Napa’s delivery of additional office space at 1300 First St., along with some other class B office space availabilities that recently hit the market.

Rents for class A space downtown are $3.50–$4.00 per square foot monthly on a triple-net basis. Rents for class B space in downtown range from $2.05–$2.70. With no planned office development projects in the pipeline for 2018 and 2019, the south Napa office submarket (airport and Napa Valley Commons area) vacancy shall remain somewhat limited for both class A and B office.

Submarket vacancy is 5.7 percent, down over 4 percentage points from the prior year. Rents have been slowly creeping upward over the past 12 months and are up by about 5 cents a square foot since the end of last year, to $1.55–$1.80. Due to limited class A supply, class B rents are increasing as landlords renovate second- and third-generation space. Rents will likely remain steady throughout 2019.

Notable office transactions include Wilson Daniels lease of 6,700 square feet at 1300 Main, and Merrill Lynch renewed in 8,500 square feet at 700 Main St. downtown. In the south Napa market, Bush Group and Trinitas Cellars leased 6,800 more square feet space at 860 Napa Valley Corporate Way, Specialty Program Group leased 8,500 square feet at 222 Gateway Road W., and BBSI leased 5,700 square feet on the first floor of 555 Gateway Drive. Redwood Credit Union purchased a 17,000-square-foot office building at 1190 Airport Blvd., with over 7 acres of excess land for a planned expansion.

The current industrial real estate inventory in Napa County totals just over 14 million square feet. Vacancy in the Napa market has remained consistently tight, sitting at 1.9 percent in the fourth quarter, virtually unchanged from 12 months earlier.

North Bay commercial real estate market reports

Read more insights from experts in various product types and areas in Sonoma, Solano, Marin and Napa counties:

There are little over 1.5 million square feet of active industrial user requirements targeting occupancy over the next six to 12 months in both Napa and Solano counties. Deal velocity slowed the third and fourth quarters, but demand remains strong. Most space requirements range from 10,000 to 250,000 square feet along with a handful of companies seeking space alternatives from 400,000 to 800,000 square feet. Demand is on the rise for deals in the range of 10,000 to 50,000 square feet from both new tenant demand coming into the market area and local organic growth.

Tenant demand in Napa and Solano counties tends to be regional wine, food, and beverage-related manufacturing, e-commerce, packaging, and furniture supply companies. Tenants that are either priced out of the East Bay submarkets or can’t find the space they require due to low single-digit vacancies in those markets have begun to consider space options in Napa and Solano counties.

Asking rates continued to rise for both Napa and Solano, which are being fueled by consistent demand, escalating cost of new construction, land prices, and substantial increases in building permits and fees. Monthly rates for conditioned wine space currently are 75–85 per square foot monthly on a triple-net basis, up 5 percent from the prior year. Light-industrial rents for 5,000–50,000 square feet range are 85 cents to $1.10.

New construction projects that have been delivered or are currently underway in 2018 include Buzz Oates Group of Companies’ 120,000 square-foot class A distribution facility at 100 Jim Oswalt Way in American Canyon. The Pigman Companies and Kraemer Land Company in the second quarter broke ground on Napa Commerce Center on phase 1 (81,663-square-foot building) at its 388,000 square-foot warehouse and industrial-flex project at the southwest corner of Highway 29, Devlin Road and Airport Boulevard by the Napa County Airport, scheduled to be completed in March 2019.

There is a planned 104,000-square-foot industrial building by Channel Properties in the Napa Valley Gateway Business Park. Innova is planning to break ground on a 73,000-square-foot warehouse building on Gateway Road East at Highway 29. At the Napa Logistics Park on Devlin Road in American Canyon, Orchard Partners and Divco West plan to start construction for Building 4 (702,000 square feet) and Building 5 (362,000 square feet), both class A distribution facilities.

ICC Stravinsky is working toward breaking ground on a 330,000-square-foot warehouse on Commerce Boulevard in American Canyon.


Solano County has over 33 million square feet of warehouse, production and light industrial space.

Class A warehouse rents are 50–60 cents per square foot monthly on a triple-net basis. Light-industrial space with 5,000–50,000 square feet is the 55–75 cent range.

Industrial vacancy for Solano dipped by over 2 percent to 4.1 percent for Q4 2018.

In Solano, Ridgeline Property Group and USAA Real Estate broke ground in the third quarter on a 378,000-square-foot class A distribution building located at the corner of Courage Drive and North Watney Way in the Solano Business Park in Fairfield. Innova’s 61,000-square-foot warehouse building was just completed at 2601 Maxwell Way in Fairfield.

In 2019, we are anticipating several new projects that are slated to break ground or be delivered to the market. In Solano, Buzz Oates is moving forward with a 262,000 square-foot distribution building on Eubanks Drive in Vacaville. Dermody Properties will be commencing construction soon on a 252,000 square-foot distribution warehouse center on Icon Way in Vacaville.

These developments come at a crucial time, as Solano County submarkets are becoming attractive for tenants looking for large blocks of space, an option that is scarcely available in nearby markets. A majority of users are requiring space greater than 50,000 square feet.


The most significant industrial leases in 2018 for Napa or Solano include Serena & Lilly’s lease of 430,000 square-foot section of the former Savemart distribution building totaling 843,000 square feet at 700 Crocker Drive in Vacaville and pending lease deal on the remaining space at the building. Other notable leases include Thissel Inc. lease of 70,000 square feet at 765 Eubanks Drive in Vacaville, Encore Glass leased 177,000 square feet at 2875 Cordelia Road in Fairfield, Ball Metal Beverage lease of 50,000 square feet at 2290 Cordelia Road in Fairfield, Coca-Cola’s 92,000-square-foot lease of warehouse space at 1245 Commerce Blvd. in American Canyon, CaMomi leased 42,000 square feet of expansion winery space at 2511 Napa Valley Corporate Drive in Napa, and M7 Wine Solutions leased 45,000 square feet at 745 Skyway Court in Napa.

A few substantial Napa building sales include 1 Middleton Way in American Canyon, the first 644,000-square-foot warehouse at Napa Logistics Park, a leased building sold to RREEF/Deutsch Bank. Del Dotto Vineyards bought a 35,900-square-foot industrial building at 540 Technology Way in Napa.

A few substantial Solano building sales include United Cerebral Palsy of the North Bay acquired a 60,000-square-foot warehouse at 5100 Fulton Drive in Fairfield. Sheedy Inc. purchased two leased light-industrial buildings with 48,000 square feet in Fairfield.


The Solano office market consists of about 3.7 million square feet in Vallejo, Fairfield, Suisun City and Vacaville. Rents for class A space in Solano are $2.25–$3.25 per square foot monthly on a full-service gross basis. Rents for class B space are $1.90–$2.10 per square foot.

Office tenant demand picked up a little over the past 12 months for Solano, and the most active submarket area in Solano continues to be the Green Valley region of Fairfield. Partnership Healthplan just finished its 104,000-square-foot, three-story expansion. Cal Regional leased 7,500 square feet, and Kindred Hospice leased 5,500 square feet at 4820 Business Center Drive in Fairfield.

Kaiser Permanente acquired 520 Chadbourne Road in Fairfield, which is a 2-story, 35,000 square-foot office building. In Vallejo, Catholic Charities of Solano leased 5,700 square feet at 125 Corporate Place.

Matt Bracco, Chris Neeb and Glen Dowling are part of the Dowling-Bracco Team at JLL (

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