AMB Developing Distrib Center in California’s Central Valley
- Jun 11, 2008
San Francisco-based AMB Property Corp., a specialist in industrial real estate, is making a foray into California’s Central Valley with a 658,000-square-foot build-to-suit development in Tracy, Calif. When complete, the distribution facility, called AMB Pescadero Distribution Center, will serve as the regional distribution center for a major retailer, though AMB has declined to specify the identity of its client yet. Still, the REIT asserts that the project is an example of the retailer thinking ahead, beyond the current slump in consumer spending. “Retailers are taking space, even in this current economic climate, to reconfigure their supply chain and gain increasingly-important operational efficiencies,” the company posited in a statement today. Tracy has a relatively small commercial real estate market, with more raw acreage trading hands than developed properties. That may change, however, as the town and much of the rest of the Central Valley become increasingly attractive as a distribution hub. Thus far, Stockton has seen most of the area’s industrial development, but Tracy–near the junction of California’s north-south artery I-5 and I-580, which feeds directly into the Bay Area–is actually closer to existing major hubs in Oakland and San Jose. “Tracy has close access to the freeway system, but industrial development here is also being driven by the expansion of shipments through the Port of Oakland,” Anthony Souza, president of Tracy-based Souza Realty & Development, who is not involved in the AMB deal, told CPN this afternoon. “There’s nowhere to put new distribution facilities near the port itself, so developers are looking at places a little further away,” The Tracy development is designed to meet LEED standards. The building’s location is a little unusual for AMB, which typically invests in properties located in infill submarkets of its targeted markets. Currently, AMB’s Bay Area market portfolio now totals about 11.6 million square feet, and all together the company owns or has a stake in about 150.2 million square feet in 14 countries.