In Slow Central Valley Market, 685,000-SF Sale Makes Splash
- May 29, 2009
Industrial property sales in San Joaquin County in California’s Central Valley have been practically nonexistent this year, but USAA Real Estate Co. just broke the monotony with the acquisition of a 658,000-square-foot distribution facility in the city of Tracy, about an hour east of San Francisco. Acting through its affiliate US Industrial REIT III, USAA took the brand new building, which is fully occupied by Home Depot Inc., off the hands of AMB Property Corp. Originally known as AMB Pescadero Distribution Center, the Class A property (pictured) carries the address of 1400 E. Pescadero Ave., and sits within close proximity of five major highways, as well as two transcontinental railroads and two international airports. AMB just recently completed the build-to-suit structure, which Home Depot is utilizing as a regional Rapid Deployment Center for approximately 100 stores in the Central California and Pacific Northwest regions. San Joaquin County’s industrial market is suffering just like most other industrial markets across the country. The vacancy rate jumped 1.9 percent in the first quarter to 14.1 percent. The Home Depot lease and the Plus’s lease of a 1.2 million-square-foot build-to-suit in Tracy from ProLogis saved the county from negative absorption. Demand was stagnant during the quarter, but things may be looking up just a bit–maybe. “Demand has been better in the last 60 days than it was in the first quarter,” Michael Goldstein, managing partner with real estate services firm Colliers International, told CPN. “From October to March, everyone was in a paralyzed state.” As for sales activity, one could hear a pin drop during the first quarter. “It was very, very quiet; that is a weak part of the market.” San Antonio-based USAA is one of the few real estate companies that are currently in a position to be on the hunt for new acquisitions. More purchases might be in the cards for its US Industrial REIT III. A USAA spokesperson told CPN that the REIT continues to actively pursue opportunities.