By Jon Peterson
New York City-based Blackstone has placed on the market for sale the 877,648 square foot Stockton Industrial Park in Stockton. It is not clear at this time what the pricing guidance will be on the planned transaction, however, the current ownership had acquired the property in March 2017 for $32.5 million, according to published reports.
Blackstone has hired CBRE Capital Markets to be the listing agent on the sale. Among those working on the transaction are Rebecca Perlmutter, executive vice president, Darla Longo, vice chair, and Barbara Perrier, vice char. Both the seller and CBRE declined to comment when contacted for this story.
The industrial park has three separate buildings as part of the asset. These are located at 1604/1488 Tillie Lewis Drive, 1605/1625 Tillie Lewis Drive and 1505 Tillie Lewis Drive. The buildings were originally developed between 1974 and 1989, and the property parcels total around 39.2 acres.
The building at 1604/1488 is a rail-served building that has a covered rail car loading dock with room for no less than 20 rail cars. This property is served by the Burlington Northern Santa Fe Railroad, which is highly utilized by Highland Wholesale Foods.
Stockton Industrial Park will give the new owner of the asset a marked-to-market investment opportunity. The property is now 100 percent leased to seven tenants, and the in-place rents of the property are roughly 21 percent below market rates, according to industry estimates. The average remaining lease term is 2.8 years. The companies in the buildings currently have been in the property for quite some time. They have a 16+ year average of tenant tenure.
The sale will also include some excess land. There is a 2.46-acre paved and fenced parcel available for lease or sale as potential trailer parking, employee parking, storage area or for use as a future building site.
Stockton as a market is part of the Central Valley industrial region. Some of the major tenants in the Stockton area include Amazon, Kraft-Heinz, BMW, Trader Joe’s, FedEx, Ferguson and General Mills; they have chosen Stockton as a strategic Northern California location for their operational needs. The Central Valley region has very strong demand with 28.4 million square feet of active tenant requirements in the market, as of the third quarter of last year.
The region continues to show strong rental rate growth for industrial product. According to data compiled by CBRE, the Central Valley had the second highest rental rate growth in the United States for a single market as of the third quarter of last year. This was 6.1 percent, and only Savannah, Ga. was higher at 8 percent.