The North Bay industrial market, comprised of Marin and Sonoma counties, had a very robust fourth quarter. Vacancy across the industrial sector deceased to 5.2 percent, net absorption, while not significant in real numbers, was still in the positive territory at 65,000 square feet. And the asking rents increased to $1.19 per square foot, according to recent industry reports. The conditions helped one owner decide to sell a property in Santa Rosa for $23 million, or $226 per square foot, which was also the largest sale of the quarter in the North Bay market.
The property, located at 1264 Apollo Way, was sold by Jamie Smith & Elaine Wong, who owned it for quite some time. According to public records, the 101,467 square foot property sold mid November of 2021 to Waldman Management Group. The property is presently leased to Access, a document management, storage, scanning and destruction business.
The timing of this acquisition should work out well for the new owners. Economic trends in the North Bay seem to be pointing toward a recovery, which will help the long term prospects for the ownership. According to a recent Marketbeat North Bay Industrial Q4 2021 report by Cushman & Wakefield, North Bay employment continues to climb with a 12-month outlook pointing int he same direction. The region’s unemployment rate, which in the fourth quarter stood at 4.8 percent is projected to slide even further. While this rate is slightly higher than the national average of 4.2 percent, things are looking positive for the North Bay.
Total leasing activity for the year totaled over 1.2 million square feet between Marin and Sonoma counties, according to Cushman & Wakefield’s, and warehousing made up the largest portion of leased space at 785,000 square feet – accounting for almost 65 percent of total industrial leasing in the North Bay. Sublease vacancy, which climbed during the pandemic, has eased year over year thanks to leasing activity as well as term expiring and space leased directly, the report stated.
The average sales price for industrial product in the North Bay is currently $265 per square foot, according to Cushman & Wakefield, which is $20 per square foot higher than a year ago. That makes for almost a 10 percent increase in price year over year. The 12-month sales volume is up from $112 million in 2020 to $196 million in 2021, the report stated. Cushman & Wakefield see this level of activity coupled with falling vacancy in key markets a strong indication towards a high-temperature seller’s market.