By Jon Peterson
Tenants looking for industrial space of 200,000 square feet or more are having to look farther away from prime industrial locations due to a lack of suitable space.
“Most of the tenants that are seeking that amount of space are having a hard time finding space in the well-known markets. Many tenants believe that the I-880 corridor in the East Bay is a prime industrial market. The problem is that it’s very difficult to find space that can accommodate a user that is looking for 200,000 square feet or more. There is no land left to build on and the buying and re-developing of an existing property doesn’t allow for that much space. This situation isn’t likely to change as the geography is what it is. Right now there certainly a lot more demand that there is space available,” said Greig Largomarsino, an executive vice president with Colliers International in its Oakland office.
An example of this is what happened with the Oaks Logistics Center in Livermore. The property is a three-building complex. There was original interest in one of the buildings by Amazon. However, Tesla agreed to come in and signed a lease for two of the buildings totaling 1 million square feet, forcing Amazon to look elsewhere. The Seattle-based retailer ended by taking 225,000 square feet in the Pinole Point Business Park in Richmond, according to sources familiar with the property.
The Oaks Logistics Center is a development project in Livermore located at 201 Discovery Drive in Livermore. This project is being constructed in a joint venture between Seattle-based Bentall Kennedy and Trammell Crow Company. The project was started in February of last year.
The Pinole Point Business Park is an 80-acre development that is owned by San Francisco-based Prologis. Amazon is the newest tenant to the property. Largomarsino declined to comment when contacted about who the new tenant is. The existing tenants in the property according to its Web site are 252,375 square feet taken by Williams-Sonoma Direct and 117,200 square feet that is occupied by Whole Foods. The complex totals 515,000 square feet of warehouse/distribution/manufacturing kind of space.