After three years of intensive work to get their largest Northern California project approved, executives of Denver-based DCT Industrial celebrated on Wednesday morning in Tracy as they broke ground on a logistics center along US Interstate 205 in the Central Valley town of Tracy.
The warm weather greeted guests from the city, county and other groups as they gathered to celebrate the new 795,732 square foot development that has the potential to reshape the east part of town. “It’s great to see that we’ve got something happening now on the northeastern part of Tracy, most of the excitement recently has been out on the western side of town, so it’s great to see that we’re also having some development out here on the east,” said Bob Elliott, District 5 member of San Joaquin County Board of Supervisors who spoke briefly during the ceremony.[contextly_sidebar id=”5e6AKOM8o5JQwV6LXJZYrpLxW1ycL6yT”]He was introduced by David Haugen, the regional manager of DCT Industrial in the Bay Area, and also the lead on the development. “We’ve been working on this project coming on three years,” said Haugen. “It’s been a huge team effort.”
Tracy Mayor Michael Maciel agreed. “I’m very proud to see the city logo up here and to hear Dave [Haugen] talk about the team effort, because that certainly is what it takes.”
The economic development for the city was his and his staff’s top priority as they considered this project. That development will help the city build a strong economy, which in turn will allow the city to serve its community better, he said.
For DCT’s part, the Arbor Avenue project brings the REIT’s investment in Tracy to $105 million along with another 750,000 square feet of existing distribution space the company owns on the southern side of the 205 freeway. And given the demand Haugen sees, he hopes DCT could do even more.
“For DCT, this is a big deal. This brings our investment in Tracy up to about $105 million, and we are excited to do more business in Tracy,” he said.
The project’s first order of business is to lay the ground for various infrastructure on the site, which was formerly agricultural land. DCT is putting in water, sewer and storm drain systems that will also help open up two parcels that sit immediately to the west of the development. Those additional parcels are still owned by the family that sold the 40-acre site to DCT. The two parcels have been zoned for commercial and industrial uses as part of the city’s effort to transform the east side of town.
The construction is expected to last 10 months, Haugen said, which would bring the development to completion in the spring of 2017. Demand has been strong in the region, but actual construction will likely draw more interest in the project, he added. “Once we start today, moving dirt [with] construction, people will think this is real,” Haugen said. “There are lots of projects in this region that have been coming for years, so you really need to be starting something for people to believe” the project is coming.
The hope for DCT is to deliver the logistics center to one tenant, but they are ready to subdivide it if the market demands it. The Colliers International team that is helping DCT lease up the building is looking at both Bay Area and Western United States-focused companies as tenants.
“That’s what makes Tracy appealing, because you can play both sides of that,” said Haugen. “You can appeal to the [person] who’s working the Western United States, because he needs access to the [Highway] 5, and we’re the first stop over the hill from the Bay Area, so the Bay Area [client] can use this.”
The Colliers team is led by Mike Goldstein, executive managing director for the firm in it’s Stockton office. He is assisted by Gregory O’Leary, executive vice president, and Ryan McShane, senior vice president, also from the Stockton office.
“It’s going to be a generational type building that you’ll see here that’ll be here for a long, long time, and we’re going to locate a tenant that is going to bring great jobs to this community,” said Goldstein.