JLL sees tight market for logistics warehouse space in the East Bay’s I-880 Corridor forcing tenants to seek space in North Bay and Tri-Valley submarkets
January 17, 2018 – Tenants and real estate investors alike are shifting their focus north and east as ever-tightening industrial real estate markets around the San Francisco Bay Area make the search for new space extremely difficult. Current vacancy in the Bay Area’s 100 million square foot industrial market is about 1.3 percent.
With total tenant demand currently estimated at around 6.5 million SF, and slightly more than 3.2 million SF under construction along the I-880 industrial corridor, there is little hope that tenants seeking modern logistics facilities will find many good solutions. This scarcity is forcing more users, especially regional distributors, manufacturers, and those in the realm of ecommerce, to rethink their supply chain strategy by looking to land space in the North Bay (Richmond, Benicia, American Canyon and Fairfield) or along I-580 towards the Central Valley.
For those seeking to travel eastbound, the first obvious stop is Livermore, which sits 35 miles east of the Port of Oakland and places industrial users 20 to 40 miles closer to the Bay Area than Central Valley locations such as Tracy, Lathrop and Stockton. In fact, with access to public transportation and close proximity to the growing workforce population, Livermore provides a unique demographic for corporate occupiers to tap into both engineering and logistics labor. Sitting just 41 miles from Silicon Valley, and within 50 miles of the region’s three major airports, Livermore is a great alternative for tenants looking for a lower cost alternative solution coinciding with closer proximity to communities from which a vast majority of employees commute.
Livermore’s stock of Class A buildings is also a big draw along with +/-815,000 square feet of proposed new industrial development underway. Global industrial giant Prologis is planning to build a state-of-the-art logistics facility with approximately 371,000 SF as well as Texas-based Crow Holdings’ three buildings already under construction totaling 445,000 SF. On the existing building front, Longfellow Logistics Center, a 610,813 SF modern logistics facility, will become available in early 2019. Situated less than 50 miles from San Francisco’s urban core, it’s in a location that optimizes local and regional distribution requirements for a broad range of users including ecommerce, retail, consumer products and durables, distributors and manufacturers.
In mid-September, Longfellow Logistics Center was acquired by Bay Area-based developer Orchard Partners. Leasing agents are Steve Chess of Townsend Commercial (who advised Orchard Partners on its recent acquisition) and Jason Ovadia, Greg Matter, and Mike Murray of JLL.
“From a speed to market standpoint, Longfellow Logistics Center has ‘first-mover advantage’ for large corporate occupiers rethinking their supply chain strategy and looking for a well-located, modern logistics facility,” said Jason Ovadia of JLL. “This location checks plenty of important boxes – from its cost effectiveness, to its close proximity to customers, affordable housing and labor,” he added.
Within the nine Bay Area counties, Longfellow Logistics Center represents the second largest existing warehouse under one roof and is situated upon 34.43 acres with immediate access to I-580. Constructed in 1998 by IDI as a build-to-suit for Circuit City, the building has all the features of a modern logistics facility, including:
· 32-foot clear height;
· ESFR sprinkler system with 250,000 gallon supplemental storage;
· 12,000 SF of existing office space;
· Warehouse offices and restrooms;
· 4,000 amps; 277/480 volt; 3 phase
· T-5 motion-sensor lighting;
· Six air transfer units provide complete air circulation every two hours;
· Fiber optic capabilities;
· 48 foot width by 50 foot depth column spacing;
· 86 dock-high doors with full dock packages and pit levelers on three sides of the building;
· Three grade level doors;
· Two secure points of access, each with full-sized guard shack;
· 416 car parking stalls; and
· 175 trailer stalls.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. AFortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $145 billion. At the end of the third quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of over 80,000. As of September 30, 2017, LaSalle Investment Management had $59.0 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit ir.jll.com