By Jon Peterson
Richardson, Texas-based The Covington Group has made its first acquisition in the San Francisco Bay Area with its $18.8 million, acquisition of a 650,000 square foot industrial property in Antioch. The asset has two separate addresses at 2200 Wilbur Lane and 2110-2300 Wilbur Lane.
“It’s our opinion that Antioch is a lower price alternative than some of the other industrial markets in the East Bay. We still think that there is good enough demand for space in Antioch as many businesses will be able to use Highway 4 to move their products around on a regional basis,” says Mark Milakovich, an executive vice president with Covington. This company does have a regional office located in Ontario, Calif.[contextly_sidebar id=”5ZfOC3cy63YmlWBpKnEV81JHkIPkldlu”]The company has already purchased a second industrial property in the San Francisco Bay Area, although Milakovich declined to give any details at this time.
He thinks that the price point for which it bought the location in Antioch is very attractive compared to the replacement cost. “We came in at around $29 per square foot. I would think that replacement cost for tilt up new construction would likely be someone in the range of $45 to $50 per square foot,” said Milakovich.
The property did have some financial issues in the past. Part of this was with the CMBS debt that had been placed on the property. The actual seller of the property was AEGON USA. The listing agent on the sale was the Walnut Creek office of CBRE, which included Kathy Kelleher, first vice president and Brian Slocum, a vice president.
“Antioch is finally feeling the economic recovery with respect to industrial real estate. It’s great to see the demand of large scale investors who are coming to the area to risk capital again. Tight supply in core regions of the Bay Area is now pushing tenants and investors to secondary markets for better deals. As a result, Antioch and East Contra Costa County as a whole is poised well for continued growth in the industrial/commercial sectors,” says Slocum.
The property is now around 80 percent occupied. The goal with this property would be to lease up at least a portion of some of the asset’s empty space. The property was first constructed in the 1950s to 1960s.
Covington as a company focuses on complex, creatively financed projects across the county. Some of its other markets include Atlanta, Nashville, Greenville, S.C., Philadelphia, Jacksonville and Detroit. Most of its assets involve large scale industrial properties. In some cases the properties involve a development or redevelopment.