By Jon Peterson
San Francisco-based Prologis is making its 1,200-acre International Park of Commerce development project in Tracy the largest development project the company has ever done in North America.[contextly_sidebar id=”b5D1yO7MdYaJZy0JUToOfbAYqo7szj3Q”]“It’s my opinion that this project will be the finest business park in the United States and the World. Very seldom can you find anywhere 1,200 acres in one location that also has road infrastructure in place to make it happen,” said Gene Reilly, chief executive officer of the Americas for Prologis. At full build-out of 19 million square feet, the park will be Northern California’slargest master-planned park, according to a prepared statement from the firm.
The first of the structures, a one million square foot building, in the Prologis park broke ground yesterday and should be completed by next summer. The publicly traded company is starting the development on a spec basis. “Our development will represent the first spec industrial building in San Joaquin County in the last five years. It will have a LEED certified design,” says Scott Lamson, president of the Northwest Division of Prologis.
Lamson declined to comment on the total cost of the development and what Prologis paid for the land. The acreage was purchased from an entity of the Pritzker Family based in Chicago. The project will be 100 percent funded by Prologis. For now, the project will be owned by the publicly traded company and no interest will be held by any of the company’s third party investment management funds.
The project will have $200 million in infrastructure and development fees. There will be $20 million in annual revenue created by the project going forward, according to Reilly.
Prologis believes that there should be very strong tenant demand. “The current vacancy rates for distribution product in the area are now at either 15-year or all-time lows,” said Reilly. Tenants figure to use the project for regional or national distribution purposes. The listing agent on the project is the Stockton and Oakland offices of Colliers International. This includes Michael Goldstein, Gregory O’Leary and Greig Lagomarsino.
The International Park of Commerce will be a very large project. “It will have between 19 million and 20 million square feet of coverage at full build out”, said Lamson. The tenant demand will dictate how soon Prologis starts a second building at the development.
Outside of the one million square foot spec building, Prologis is close to signing two leases within the International Park of Commerce development. There will be two Fortune 500 companies signing some new leases in Tracy in the next 90 days or so, which would result in bringing an additional 1,000 new jobs to the city.