Demand Grows for Industrial Space
Industrial space is becoming difficult to find in Napa County. When the new retail and hotel development in downtown Napa is combined with the wine industry’s continuous need for agricultural land, is there any room to accommodate the growing demand from industrial users? Surprisingly, the answer is yes.
American Canyon
American Canyon’s Green Island Road seems to be a hot spot for industrial space. Keegan & Coppin is offering 16.8 acres of industrial-zoned land for sale near the Napa County airport. Priced just under $5.50 per square foot, this property is adjacent to a newly approved wine storage warehouse and is rail accessible. Just down the street, also on Green Island Road, Colliers International is offering 5.38 acres of industrial land for sale at $1.5 million or for lease at $10,000 per month (NNN).
Moving north on Highway 29, Cushman & Wakefield represents the Napa Airport Corporate Center on South Kelly Road. This 50-acre site is planned to house eight buildings ranging in size from 20,248 to 232,500 square feet. These industrial buildings will be offered for sale, lease or build-to-suit. Panattoni, the project developer, is anticipated to begin construction this summer. Like the Green Island Road properties, this site is also rail accessible.
South Napa
South Napa’s Gateway Business Park remains a haven for industrial properties. On the corner of Technology Way and Gateway Road West, Cushman & Wakefield and Lake Street Ventures are about to break ground on the Napa Gateway Commerce Center. This 3.1-acre site is proposed to have two flex/light industrial buildings, totaling 41,280 square feet. Buildings can be purchased or leased individually or as condominiums, and can be divisible to 2,844 square feet. Occupancy is anticipated for October 2008. Also in the Gateway Business Park is Sheehy Commerce Center. Only one unit is for sale in this 12-unit industrial condo building. Priced at $200 per square foot, this unit offers a glass storefront and a roll-up door.
Across from the Gateway Business Park on Jamieson Canyon Road is Napa Valley Crossroads. This 15.62-acre development site features two high-cube/distribution buildings totaling 313,812 square feet. The first building is fully leased. The second building, totaling 163,000 square feet, has just been completed and is now available for $0.575 (NNN).
In South Napa, on Devlin Road, Grubb & Ellis is offering 21.79 acres of industrial-zoned land. Priced at $5.25 million, this land comes with an approved 11-lot tentative map and is available for sale, lease or build-to-suit.
Neighboring that property and also on Devlin Road is Vineyard Commons. Here, Cushman & Wakefield is offering industrial condos for sale or lease. This 25,488-square-foot building offers Highway 29-approved signage, two dock-high loading doors and one grade-level door per unit; pricing begins at $215 per square foot.
Industrial properties are also popping up in the Napa Valley Corporate Park. On Latour Court, Cushman & Wakefield is offering 11,159 square feet of office/warehouse space for $0.85 (NNN). This is the last remaining unit of its size in the park that features a dock-high door. The Vines Business Center, also in the Napa Valley Corporate Park, was recently completed. This brand new, 36,488-square-foot industrial/office building is now available for lease at $0.85 (NNN).
Napa
In Napa proper, Cushman & Wakefield is offering barrel storage space on California Boulevard. This temperature-controlled 43,000-square-foot building configuration lets one tenant occupy half of the building exclusively. Building features include a fogging system and four 3,000-gallon tanks for racking and blending. Short- and long-term arrangements are available in this unique facility.
Summary
As you can see, not only are there industrial properties popping up throughout the county, growing demand is causing an increase in asking prices. In third-quarter 2007, the average asking sale price was $159.04 per square foot compared to $143.19 in fourth quarter 2006. Rising construction costs and finite supply will continue to push occupancy cost upward. With interest rates falling, expect more deal signings in the coming months. And as always, stay tuned to the next Commercial Real Estate Report for up and coming news throughout the Napa Valley.
