By Meghan Hall
Michaels, a chain retailer for art and hobby supplies, has inked a large lease in unincorporated Tracy. According to a source familiar with the market, Michaels signed a lease for 925,000 square feet at the North Tracy Commerce Center about a month ago. The property is owned by Newport Beach, Calif.-based Phelan Development and Cortese Real Property, LP.
Colliers International’s Stockton office represented the tenant in the deal, but declined to comment when contacted by this news organization.
In all, the North Tracy Commerce Center is a three-million square foot, multi-phased industrial park. Michaels has leased Phase I of the project, and leasing has begun for Phase II, comprised of two buildings each totaling 126,204 square feet.
The center is located between the Bay Area and Central Valley, directly off of Interstate 205, with access to major freight movement centers along Interstate 5. There are upwards of 350,000 warehouse, manufacturing and labor employees within a 45-minute drive of the complex, and Tracy, which is the second-most populated city in the San Joaquin Valley, has a growing population of 90,000 and a median household income of $80,000 per year.
Other major occupiers located in Tracy include DHL, Crate & Barrel, Best Buy and Costco. An offering memorandum for Phase II states that the location of the North Tracy Commerce Center makes it easily accessible, but with less traffic and congestion associated with other nearby locations.
At the end of the second quarter, the industrial vacancy rate in the Tracy submarket was up about 40 basis points to 8.1 percent, according to a Colliers International report. Net absorption came to 342,223 square feet, with the year-to-date total coming to more than 1.1 million square feet. In the market there is about 29.6 million square feet of industrial space, of which about 2.4 million square feet was available at the end of the second quarter. While the San Joaquin County industrial market did experience some impacts due to COVID-19, Colliers maintains in its report that activity remained fairly strong, and there was only a brief pause in activity, a positive sign for the months to come.