At a time when options for sizable North Bay warehouse space are dwindling, a large distribution center project planned for the wine production cluster south of Sonoma took a step closer to reality with the sale of the property.
The just-over-19-acre property at 22801 Eighth St. E. at the northwest corner of Highway 12 and Eighth Street East sold 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 on April 29, according to public records.
“The dearth of developable land is a real strain,” said Joseph “Jose” McNeill III, whose Fairfield-based McNeill Real Estate Services is leading development of the project called Victory Station.
Victory Station would have about 260,000 square feet of warehouse space in a concrete tiltup structure with 25 truck-dock doors and some office space, according to McNeill. The project cost is estimated to be about $30 million. Washington Capital Management has brought in investors to back the project.
Odyssey Development LLC had been developing Sonoma Valley Business Park for several years as a multibuilding retail-industrial project. The sale has been in escrow for more than a year as the project was reconfigured and taken back to the county of Sonoma for zoning, entitlement and design review. After a final design meeting, the goal is to get documents filed in time to begin construction before the rainy season. Because of demand for large distribution warehouses, McNeill expects much or all the space will be preleased by the time the project is completed in summer 2017 or even before the walls go up.
That happened recently on two projects he has helped develop for a construction trade union pension fund. Pack n’ Ship preleased all the 226,000-square-foot first warehouse Greenwood Business Park project in south Napa last June. Then Clover-Stornetta Farms and Scott Laboratories preleased more than half the 260,000-square-foot Cader Corporate Center project in south Petaluma in early February.
The first-quarter Sonoma County industrial real estate vacancy rate was 5.4 percent of 24 million square feet, according to Keegan & Coppin/ONCOR International. Yet, three-quarters of the vacancy was in Santa Rosa and Rohnert Park. It was 2 percent to 4 percent in Petaluma and by Sonoma County Airport, submarkets with about half the county’s urban industrial space.
The Victory Station project team includes Devcon Construction on design-build, RMW Architecture & Interiors and Santa Rosa-based civil engineering firm Adobe Associates. Steven Leonard, Brian Foster and Niels von Doepp of Cushman & Wakefield are handling leasing.
Rhonda Deringer, partner of Keegan & Coppin and former Odyssey president, represented the seller, and McNeill the buyer.