LBA Logistics Buys Sacramento Industrial Property
- Mar 11, 2019
LBA Logistics has acquired 3771 Channel Drive, a 624,356-square-foot warehouse/distribution center in West Sacramento, Calif., from Sacramento Foodco Investors, in what is the largest industrial sale of 2019 so far.
Colliers Sacramento represented both parties in the transaction, while Newport Real Estate Services’ President Glen Allen served as asset manager for the seller, orchestrating a multimillion-dollar restoration of the property.
“It’s inarguably one of the best submarkets in our region,” Tommy Ponder, Colliers’ vice president, told Commercial Property Executive. “We’re seeing a lot of institutional money circle our market as one of the last places for affordable property and value-add opportunities like this.”
This was a private sale, with Colliers coming up with a list of 20 logical buyers, from which five offers emerged.
Upon closing, the property was 63 percent leased. Colliers Sacramento brokered a 389,000-square-foot lease to TK Classics last year, the largest in the area. Today, the furniture company takes up the majority of the building’s space. The property also has an approximately 180,000-square-foot cold storage facility that Colliers has been trying to lease. That component will need to be completely rebuilt to get it up and running again.
According to Ponder, the 50-acre site also includes opportunities for expansion and future development of up to 300,000 square feet.
“A big appeal was the value-add aspect,” he said. “There’s a 10-acre site that’s available immediately for development. You can go vertical on approximately 350,000 square feet with the additional land.”
A rising market
Colliers’ most recent industrial market report for West Sacramento noted that the region is the second-largest industrial submarket in the Sacramento area, with more than 19 million square feet of existing inventory and a record-setting year of absorption in 2018.
In fact, Colliers International named Sacramento one of 10 emerging industrial markets to watch in 2019. This is spurred by an influx of institutional-grade investment companies coming into the area.
“It’s a great location because of being close to all access points and all major freeways and interstates, so from a logistics standpoint, it’s really strong,” Ponder said. “That definitely played into the opportunity.”
In December, a joint venture between Bixby Land Co. and an institutional partner received $180 million in credit to purchase a four-building, Class A industrial portfolio totaling 982,493 square feet in San Bernardino, Sacramento and Phoenix.
Image courtesy of Colliers Sacramento