Amazon Industrial Building in Bay Area Sells for $105M

NorCal Logistics Center

CT Realty has wrapped up the first phase of its 4.4 million-square-foot NorCal Logistics Center in the San Francisco Bay Area with the disposition of a new building that’s leased in its entirety to Amazon. CT sold the approximately 1.1 million-square-foot facility at 4532 Newcastle Road in Stockton, Calif., to Bentall Kennedy (U.S.) LP in a transaction valued at $105.3 million.

NorCal spans 342 acres in the Central Valley submarket, an area with easy access to a supply chain infrastructure that connects to the Northern California ports, as well as those in Los Angeles/Long Beach, Portland and Seattle/Tacoma. The state-of-the-art building at 4532 Newcastle commanded significant amount of attention from the investment community.

“The broad interest surrounding this sale reflects the increasingly high demand by tenants and investors for quality logistics facilities near heavily populated metropolitan areas,” Carter Ewing, managing partner at CT Realty, said in a prepared statement.

CT completed the development of 4532 Newcastle in 2018 and sold the two other buildings comprising the 1.7 million-square-foot first phase of NorCal to Prologis for $47 million. The company has already commenced development of NorCal’s second phase, which will yield an additional five spec and build-to-suit facilities totaling 2.7 million square feet. The properties are sprouting up at a time when users are hungry for new product. “Vacancy is at near historically low levels and demand remains strong for large blocks of modern distribution space,” according to a fourth quarter 2018 report by Cushman & Wakefield, which handles leasing at NorCal. 

Multi-tasking

CT Realty has a national construction pipeline that currently encompasses 5 million square feet. Projects presently underway include Interchange 55 Logistics Park, a 1.3 million-square-foot property in Romeoville, Ill., a suburb of Chicago. The company is also busy developing an aggregate 3.6 million square feet of premier logistics offerings in the Dallas-Fort Worth area, Indianapolis and Atlanta.

National demand for Class A industrial space persists, buoyed principally by e-commerce and consumers’ increasingly loud cry for next-day and same-day delivery, as CT noted.

Image courtesy of CT Realty