By Meghan Hall
Amazon is continuing its push east, this time taking a large chunk of space on the other side of the Altamont Pass. The e-commerce giant has recently solidified a lease for 850,000 square feet at Prologis’ International Park of Commerce, according to an industry source. The agreement adds to the one million square feet of space that Amazon already leases inside the business park, and further expands its presence in Tracy, which is becoming a major distribution hub.
Amazon has taken Building 14, which totals 851,200 square feet and sits at the heart of the campus. The building’s expected completion is 2021. Amazon’s first building in the park, known as Building 1, is 1,001,449 square feet. Other completed and leased buildings include Building 9, which totals 641,364 square feet and has been leased to Best Buy, Building, which is 664,333 square feet and l eased to Zinus, and Building 19, which totals 724,775 square feet and is leased to Home Depot.
As a whole, the Prologis International Park of Commerce (IPC) is an 1,800 acre, fully-entitled master-planned park. IPC is adjacent to the Bay Area and about 48 miles from the Port of Oakland, and within an hour’s drive of a consumer base of 7.2 million people, according to Prologis. 35 million people can be accessed by same day travel from the site, and 64 million can be accessed by next day travel.
“International Park of Commerce’s location is ideally situated to serve the coveted San Francisco Bay Area consumer base, while leveraging the benefits of the Central Valley’s large and diverse labor force,” states marketing documents released by Prologis.
The project includes 95 acres of parks, walking trails and open space and sustainable landscaping. The pre-approval of projects allows Prologis to develop rapidly. The firm also offers help with pre-construction and facility design management. The development is also outfitted with sewer and recycled water infrastructure, multiple data and communication service providers, including fiber optic connection, and other utilities. All buildings are built to LEED Standards.
Amazon has quickly been expanding its reach across the Bay Area. In May, Amazon took all 707,000 square feet at the Bay Area Logistics Center in Richmond, and all of Black Creek Group’s Hayward Logistics Center, which totals 506,000 square feet. In the fall of last year, Amazon leased 600,000 square feet at the Longfellow Logistics Center in Livermore.
Submarkets like Tracy—where Amazon’s newest lease is located—continue to do well thanks to the expansion of major companies such as Amazon. In another recent lease, Michaels, a retailer and craft supply store, leased 925,000 square feet in unincorporated Tracy, at the North Tracy Commerce Center, owned by Phelan Development.
Both leasing and development in Tracy have remained fairly consistent over the past couple of quarters. While vacancy rose slightly to just over eight percent, according to a report released by Colliers International, net absorption came to 342,223 square feet. Development kept pace to match demand, in what Colliers has classified as a “tight” market: During the second quarter, Five Class A advanced and manufacturing/distribution buildings were developed by Panattoni, and ranged in size from about 51,000 square feet to about 149,000 square feet. An additional six buildings are under construction, which total three million square feet. Prologis’ IPC continues to have a large impact on the market and accounts for 1.8 million square feet of total development currently underway in Tracy.