Category: E-Commerce

Business landscape looks bright for Shafter

January 9, 2020 | View PDF

Courtesy Wonderful Company

The Walmart distribution center is scheduled to open in the fall of 2020.

The City of Shafter has been enjoying a reputation of being one of the fastest growing cities in business in recent years, attracting such companies as Target, Ross and several other big retailers.

The most recent addition is Walmart, which is scheduled to open the most technologically advanced distribution center in the nation in Shafter in the fall of 2020.

Bob Meadows, business development director for the city, says Shafter is a sought-after destination for businesses, large and small.

“We have several irons in the fire. This year should see the city continue to build on this success and make 2020 a special one.”

Financially, the city has been touted as one of the most financially sound cities in the state. Meadows said that since he joined the city last year, he has become aware of the great reputation the city has in Kern County, as well as in the state of California.

A big draw for the city, Meadows says, is the willingness of the city to work with potential developers and retailers, as well as the technological advantages Shafter has. “Having the city connected through our fiber optic lines throughout the city has been a great benefit.”

Looking forward into 2020, Meadows said that the biggest item on the agenda so far is the opening of the Walmart facility. This will mean over 200 jobs for the community, with about a third of the jobs STEM-related – tied to science, technology, engineering and mathematics — with the other two-thirds general laborers.

“We are excited to see how many of the jobs are going to go to Shafter residents, which will mean the dollars staying here locally,” commented Meadows.

Another exciting development for 2020 is the growing relationship between the city and the Kern County Hispanic Chamber of Commerce. The KCHCC has been very beneficial to county and its businesses, Meadows said, with a good many of businesses working with the chamber enrich the local communities.

In addition to the contacts that are made with a relationship with the chamber, they also have made a big impact on local businesses with holding their business academies. The academy is a 12-week program that helps small local businesses learn how to operate successfully, as well as how to market their products and services, and get their companies out in the community. “We are looking forward to the possibility of holding a business academy right here in Shafter for our local businesses,” said Meadows.

As far as new businesses on the horizon, Meadows said that there has been a lot of interest in several locations throughout the city, including the property at Central Avenue and Central Valley Highway that used to house Brookside Deli. “We have a couple of people that are very interested in the property, and they both are food-related, which is good because the property already is equipped to house a food establishment,” Meadows said.

He said that they also have had discussions about different businesses coming to Shafter, including a veterinarian, additional automotive service businesses, a drive-thru car wash and additional medical clinics. “Rural medicine is a big issue in our economy, with a lot of people looking for affordable healthcare,” Meadows said.

The city was the recipient of surplus of sales tax revenue last year. This unexpected development was the result of a large number of customers who ordered products online this year.

Retailer William Sonoma paid the city a large amount of sales tax money that was not forecast. “A lot of people ordered online this last year,” said Meadows, “which was very nice for us.”

Meadows said that the businesses at the Wonderful Logistics Park do amazing things when it comes to business relationships across the state and the United States, but there is not a lot of actual income that is produced out there.

“The difference in the William Sonoma retailer and retailers like Target and Ross is that for the online ordering, the sale is actually in the city of Shafter. With the distribution centers, the sales are not done here, the product is just shipped to and from a location, so the sales tax money goes to the city where the sale actually takes place.”

In addition to the Hispanic Chamber, the city also has been in contact with the Small Business Development Center in Bakersfield for a possible workshop in the near future. The group, based out of Cal State Bakersfield, held a workshop this last year that was well attended and gave local business owners valuable information about how to grow your business, including marketing and creating a presence on social media, as well as how to go about financing a business venture.

“What we are looking at would build on that workshop, becoming a regular meeting that would be set up for our small businesses who may need advice on how to operate their business, as well as getting them in contact with the correct people and agencies to further their success,” Meadows said.

“The business landscape is looking up for Shafter when it comes to all phases of the business arena,” Meadows concluded.

https://www.theshafterpress.com/story/2020/01/09/news/business-landscape-looks-bright-for-city/1204.html

This California Farm Town Is Launching Startups Faster Than Seattle, Boston, and the Bay Area

By Guadalupe Gonzalez Staff reporter
Knowing little English, Rosibel Hurst came to the U.S. from Honduras dreaming of a medical career. She translated her nursing coursework using English-Spanish dictionaries. In 2018, Hurst’s Bakersfield beauty startup made $2 million–which gave her the courage to quit the full-time nursing job she’d kept to support her five-yearold company. “I’m finally going all in,” she says. “I’ll build the business every day and see where it takes me.”
KAYLA REEFER

Once a recurring punch line in Johnny Carson’s monologues, the agriculture-and-oil town of Bakersfield, California–home to the country’s most prolific carrot farm–is not the most obvious example of a West Coast startup hub.

But the Central Valley city, population 400,000, has vaulted onto this year’s Surge Cities list by outperforming 46 other metro areas–including the Bay Area, Boston, and Seattle–in net job and business creation in the past year.

“Incredible things are happening here,” says Irma Olguin Jr., co-founder and CEO of Bitwise Industries, a Fresno-based tech academy and software startup that’s helped create about 1,000 jobs in the area. It’s opening a Bakersfield location in 2020. “We’re seeing validation from VCs and investment banks, and there is a momentum around local revitalization.”

According to Anna Smith, co-founder of local real estate firm Sage Equities, this Bakersfield boom has been helped by entrepreneurial Millennials who’ve returned home from more expensive cities. They’re finding a growing tech community, bolstered by events like the 59-day hackathon led by nonprofit 59DaysofCode.

Maria Coward’s 27-year-old restaurant, La Costa Mariscos, serves authentic Puerto Vallartan seafood dishes in the city’s historic Ice House Building. She recently opened a second location across town.KAYLA REEFER

Latinx founders, whose ranks swelled by 36 percent from 2007 to 2012 in Bakersfield, have also been essential to the city’s evolution. Today, approximately three of every 10 companies in town are Latinx owned, and membership for Bakersfield’s Hispanic Chamber of Commerce has ballooned from 200 businesses to 1,200 in less than a decade.

Rosibel Hurst’s Bellissima Medical Aesthetics is one of 8,500 local Latinx-owned businesses. In 2014, the founder, who was born in Honduras, launched her beauty clinic, which offers procedures such as Botox injections and skin-tightening treatments, from a single room inside of a supportive doctor’s office. Today, Bellissima is profitable, with roughly $2 million in annual sales and 13 employees. “I was able to grow this company because of the help I got from people here,” she says. “Bakersfield is a giving city.”

As the field of startups grows in Bakersfield, so do the resources to sustain it. In 2018, Bakersfield businessman John-Paul Lake co-founded the city’s first angel investing firm, Kern Venture Group, and worked with the city’s community college to create Launchpad, which helps local entrepreneurs grow their businesses.

At Oasis Air Conditioning, founder Ben Dominguez and his 28 employees are expanding into the solar panel market to meet growing demand from the city’s homeowners.KAYLA REEFER

Originally created in Fresno to assist refugee farmers, loan fund Access Plus Capital has doled out 22 microloans worth more than $1.6 million to Bakersfield entrepreneurs since it began servicing the city in 2012.

“People are realizing that the Central Valley is changing,” says Edward Palomar, manager of the fund’s Bakersfield office, which opened in 2017. “They see the opportunity for growth here.”

https://www.inc.com/magazine/202002/guadalupe-gonzalez/bakersfield-california-central-valley-latinx-entrepreneurs-2019-surge-cities.html

FRESNO COUNTY ECONOMIC FORECAST: INTERNATIONAL INTEREST COMES ROLLING IN

Construction activity in Fresno keeps coming, including this three-story office building under construction near Palm and Herndon avenues. Photo by Edward Smith.

Published On December 4, 2019 – 1:33 PM
Written By 

EDITOR’S NOTE: This is one of four economic forecasts The Business Journal does every year for each of the four counties in our coverage area.

This seems to be a prime time for the world to kick the tires on Fresno County.

Interest from companies from far-flung countries including China and Japan has kept economic development officials busy, and even corporate America is taking a closer look at locating in Fresno County on the heels of Amazon and Ulta’s investment in e-commerce distribution centers.

At the same time, Fresno County’s agricultural sector continues to reassert itself as a force to be reckoned with. In fact, based off 2018 crop statistics, Fresno County once again became the top agricultural county in California and the U.S. — a position it hasn’t held since 2013.

Economic development and job creation are job one for Fresno County Economic Development Corp. Will Oliver, director of business services for the Fresno County EDC, noted that 2019 “was filled with much activity, interest and momentum.”

Fresno County welcomed new out-of-state e-commerce operations who either located facilities here or contracted with local third-party logistics partners, Oliver said.

Oliver noted considerable interest in the small cities of Fresno County. One example is Initiative Foods, which is one of the nation’s largest baby food manufacturers, and a major international exporter. It recently completed a 30,000 square foot addition at its Sanger manufacturing plant. Another city, Reedley, is using available resources to lure an advanced food manufacturer.

The region’s designation as a federal Opportunity Zone has done much to jumpstart some of that interest, Oliver noted. The geographical designation provides incentives in the form of reduced capital gains taxes on investments for capital projects.

Fresno County is preparing to kick Opportunity Zone marketing of the region into high gear.

“Much groundwork has been laid to support Opportunity Zone investments by preparing projects and developing a digital prospectus to market the region’s assets, which will be live in 2020,” Oliver said.

Kingsburg recently made big news with T-Mobile’s announcement that it planned to locate a call center there that would create 1,000 jobs, which would be a major jolt to the local economy. That project is contingent on the telecommunication company’s successful merger with Sprint.

Fresno had a bit of a coming-out party earlier this month as host of the California Economic Summit, which included announcements of millions of dollars in investment into the Central Valley. It provided some much-needed momentum heading into the New Year, Oliver noted.

“2020 will certainly be focused on recruiting and expanding high-growth, traded sector companies and industries, such as in health care, agricultural technology and manufacturing,” Oliver said.

On the international front, while much of the economic development work is understandably behind the scenes and not for public consumption, word has trickled down that a Japanese company called Manda Fermentation Co. is on the verge of locating operations in Fresno County. Other Asian countries are looking at the county, undoubtedly drawn to it as a center for international agriculture.

On the agricultural front, Jan. 31, 2020, is a pivotal deadline as the state’s water managers — large and small — must provide plans for how they will manage groundwater usage under the state’s Sustainable Groundwater Management Act.

Ryan Jacobsen, CEO/executive director of the Fresno County Farm Bureau, said the sustainability plans will take 20 years to implement, with progress reports required every five years. But just getting to this stage has taken a lot of time, not to mention paperwork, as each plan is “hundreds, if not thousands of pages long,” he said.

Jacobsen said a number of factors — ongoing trade negotiations with China, new federal scientific guidelines on the pumping of water from the delta and engaged leadership on the local, state and federal level — give him reason for optimism.

Trade friction with China has been especially worrisome.

“The trade issue is front and center,” he said. “I’m optimistic that we can come to an agreement with China. I’ve been an eternal optimist.”

https://thebusinessjournal.com/fresno-county-economic-forecast-international-interest-comes-rolling-in/

MADERA COUNTY HOUSING BOOM COULD SPUR AT LEAST ONE NEW CITY

Brent McCaffrey, president of Tesoro Viejo and McCaffrey Homes, shows visitors from the real estate industry and local governments a model of the town center at Tesoro Viejo, a large, mixed-use community being built in southeast Madera County. Photo by David Castellon

Published On October 25, 2019 – 1:35 PM
Written By 

It’s been about three years since the groundbreaking ceremony for Riverstone, one of two massive planned housing developments being built off Highway 41 in southeast Madera County.

Considering the estimated scope of the project — 6,578 homes on about 2,000 acres — it may not be completed for 30 years or more.

But Riverstone and the other big Madera County development to the north along 41, Tesoro Viejo, aren’t just about home building.

In the mix

Both are mixed-use developments with plans to include commercial, comprised of spaces for office, retail and light industrial businesses alongside stylish homes and recreation options that include parks, community centers and trails that will allow residents to walk, jog or bicycle to the nearby San Joaquin River.

In fact, development groups involved with the 1,600-acre Tesoro Viejo development have erected a little more than 70 of the 5,190 homes planned to be built there, and they’ve already built a Madera County fire station and a county sheriff’s sub station on site, as well as “The Hub,” a welcome center for potential homebuyers, along with a restaurant and a brew house planned for the future.

 

Educational opportunities

Tesoro Viejo has also completed a kindergarten-through-eighth-grade elementary school, and even though only about 20 homes have been occupied, the school is fully operational with children from outside the development bussed in.

Eventually, the plan is for the elementary school to mostly serve children living in Tesoro Viejo, said Brent McCaffrey, president of Tesoro Viejo and McCaffrey Homes, the lead developer on the project.

As for Riverstone, the developers there held a second groundbreaking off 41 and Avenue 12 Thursday afternoon for Riverwalk, the first commercial portion of that project.

The plan is for Riverstone to have 1.5 million square feet of commercial space, with Riverwalk comprising about two-thirds of that, said Timothy Jones, a developer and principal in the company that oversees the development, Riverstone Development LLC.

“We have 95 acres along 41,” for Riverwalk, he said.

 

Multi-family in the works

And the commercial area — which unlike Tesoro Viejo will have no industrial businesses — will be mixed use, meaning that some residential and office spaces will be available above some retail and office spaces, Jones said.

In addition, beyond building the single-family homes in the residential portions of Riverstone, “We anticipate having some apartments, definitely some [condominiums] in the mix,” he added.

Riverstone began construction before Tesoro Viejo, and homes started selling there in 2017. So far, about 400 completed, single-family homes have been occupied, with at least 50 more under construction, Jones said.

 

Building ahead

As for the demand among homebuyers, he said, “We’ve got six builders in there now. We’ve got a couple more trying to get in, and we are building ahead of our expected absorption.”

Some experts have said Madera is in the midst of a building boom, in part because spaces for developments with natural areas have become scarce in the Fresno area.

“Years ago, you had to live on a golf course. New people are requiring outdoor living and trails as the No. 1 thing they’re looking for. In all our entire master-planned communities here in Madera County, that is a big emphasis,” Madera County Supervisor Brett Frazier said.

 

New neighborhoods

At Tesoro Viejo, McCaffrey said the home building will be divided into nine “villages” — essentially neighborhoods — each with its own park, while Jones said 20-23 small parks are planned to be built throughout Riverstone.

Both also are planning to build multiple community centers, while Riverstone’s plans also include the construction of three elementary schools, along with a junior high school and high school.

“The first elementary school is set to break ground in January of 2020” and open in August of 2021, said Jones, adding that even after Riverstone is more fully developed, the schools likely will serve not only students there but also those in nearby areas, including The Ranchos and Rolling Hills.

 

Startups welcomed

Among the selling points at Tesoro Viejo — where three million square feet of commercial space is planned to be built — and Riverstone is residents who may start up or work at businesses in the developments will be able to avoid the traffic and time involved in commuting to and from Fresno, Madera and other nearby areas.

And with the addition of restaurants and possible places for entertainment and shopping, “When people come into the town center, they will hear about the lifestyle, not just a home to live in or a school to go to, but also the social infrastructure where you can live, work, play,” McCaffrey said last month to a group of real estate brokers, local government officials — Frazier among them — and others brought in to hear about the development on a bus tour put on by Fresno State’s Gazarian Real Estate Center.

 

Way of life

In fact, he said his family has donated land to build a Catholic church in the town center.

“So we’re trying to create not just a development, but also the social fabric of the community.”

If this all sounds like a couple of cities in the works, you wouldn’t be far off the mark.

In 1995, Madera County supervisors adopted the Rio Mesa Area Plan, which included supporting residential and commercial development along 15,000 acres of then mostly farmland bordered by Highway 41 to the west, the San Joaquin River to the south, east toward Millerton Lake and Highway 145 to the north.

The plan was to merge those developments into a city, which would be the third in Madera County, after Madera and Chowchilla.

Tesoro Viejo sits in those boundaries, and McCaffrey said he expects his development and possibly some proposed to the south of his could be incorporated someday into a single city.

 

Town of its own

For his part, Jones said his development is far enough south of the Rio Mesa area that it’s unlikely Riverstone is unlikely to be rolled into a city with Tesoro Viejo.

But Riverstone already is a larger development in terms of acreage and number of homes, and on top of that, the developers own about 5,000 adjoining acres they want to get zoned for housing and eventually build an additional 20,000 residential units and dedicate about 600 acres of that for additional commercial development.

“That whole area out there could be another city,” Jones said of Riverstone, but he shied away from saying whether he would support that happening. “You know, we are so far away from that. We’re talking 20 to 40 years before that’s in contemplation realistically. So I can’t tell you the answer to that. I don’t know.”

He added, “I think the issues of becoming a city are complicated.

Gap is bringing 600 jobs to the Fresno area

FRESNO, Calif. (KFSN) — Gap Incorporated is set to begin hiring for the 2019 holiday season which will bring more than 600 jobs to the Fresno area.

The company has announced its plans to hire employees for a range of seasonal opportunities including sales associate positions, customer relations representatives and shipment coordinators at distribution centers.

It is hosting a one-day hiring event Saturday, October 5, at all Gap, Banana Republic, Old Navy and other Gap incorporated locations across the United States from 10 a.m. to 2 p.m.

Most contingency offers will be made immediately after interviewing at the hiring event.

All seasonal associates will also enjoy the same merchandise discount as the company’s current associates, just in time for holiday gift-giving.

Signed State Budget Delivers Millions for the Valley

Friday, June 28, 2019

Funding included for Career Technical Education, Safe Drinking Water, and Valley Fever

SACRAMENTO – Today, Assemblymember Rudy Salas (D-Bakersfield) issued the following statement regarding Governor Newsom’s signing of the 2019-2020 state budget:

“Governor Newsom’s first state budget reinforces California’s commitment to supporting working families, small businesses, students, seniors and veterans.  This budget builds record reserves for a rainy day and pays off debt while doing more to shore up working families and tackle challenges of affordability and quality of life,” said Assemblymember Salas.  “This budget invests in the Central Valley by addressing the healthcare workforce shortage, allocating $2 million to support valley fever research and providing millions to address safe and affordable drinking water.  The budget also includes funding to help train, grow, and support our workforce and students by expanding workforce development and youth leadership programs.”

State Budget Includes:

  • $2 million to the Valley Fever Institute at Kern Medical Center to support valley fever research
  • $12.5 million General Fund one-time for safe drinking water in the Central Valley, including $2.5 million to bring communities like Arvin into compliance with safe drinking water standards
  • $705,000 for three Independent Living Centers (ILC), including ILC of Kern County
  • $40,000 for the California Central Valley Economic Development Corporation
  • $1.1 million for planning of Bakersfield College Delano Center: Learning Resource Center Multi-Purpose Building
  • $1.6 million for planning of West Hills College Lemoore Instructional Center Phase 1
  • $12 million over three years for the Youth and Family Civic Engagement Initiative

 

The main budget bill – AB 74 – can be found here.

Valley Fever Funding

“We are grateful to Assemblymember Rudy Salas for authoring this legislation and bringing critical funding to Kern County – where it is needed the most.  As Medical Director for the Valley Fever Institute at Kern Medical, I am honored to lead our clinical team as we continue our mission to increase education and awareness for the public, patients and health care providers; provide the best patient care available and promote research that includes epidemiology, clinical drug development, prevention, immunology and immunizations.  The $2 million in funding will directly help the patients we care for every day at the Valley Fever Institute.” – Royce Johnson, M.D., Medical Director of the Kern Medical Valley Fever Institute and Chief of Infectious Diseases at Kern Medical

“Every day at the Valley Fever Institute we care for patients fighting Valley Fever.  The $2 million will benefit countless people in Kern County and beyond.  We are grateful to our dedicated legislators for supporting this critical funding and working with us to ensure the health of our community.” – Russell V. Judd, CEO, Kern Medical

 

Dolores Huerta and Martin Luther King Jr. Freedom Center’s Youth and Family Civic Engagement Initiative (YFCEI)

“We are grateful that the legislature and the Governor have made it possible to expand the Dolores Huerta Foundation and Martin Luther King Jr. Freedom Center’s Youth and Family Civic Engagement Initiative (YFCEI) to reach more underserved youth throughout California, with a focus on youth engagement, youth empowerment and leadership development utilizing the philosophies of non-violence advocates.  The leadership training that the youth receive will be magnified tenfold as the youth take the lessons learned to address and resolve the many issues that they are confronted with in their respective communities.” – Dolores Huerta

This funding supports the YFCEI’s efforts to serve young people in 12 counties throughout California over the next three years.

 

Independent Living Centers of Kern County

“We want to express our gratitude and dedication to Assemblymember Salas and his staff for the work they have done to maintain equal base rate funding of all Independent Living Centers in CA.  These continued funds come directly to Kern County and stay in Kern County to support the needs of all people with disabilities.” – Jimmie Soto, Executive Director of the Independent Living Center of Kern County

 

California Central Valley Economic Development Corporation

“The California Central Valley Economic Development Corporation is excited about this unique investment to further business development in the Central Valley.  We greatly appreciate Assemblyman Salas championing this effort, and look forward to the development of new and expanding businesses as a result of this program.” – Lance Lippincott, CEO and President of Kings County Economic Development Corporation

We anticipate additional funding for the Central Valley as the Governor signs the remaining budget trailer bills.

https://a32.asmdc.org/press-releases/20190628-signed-state-budget-delivers-millions-valley

Three Kern companies make the 2019 Inc. 5000 list of fast-growing businesses

Three Kern County-based businesses — Grapevine MSP Technology Services and Stria LLC in Bakersfield and Tasteful Selections LLC in Arvin — have been named to 2019’s Inc. 5000 list of the nation’s fastest-growing privately held companies with revenues of more than $2 million last year.

Tasteful Selections, a grower and seller of bite-size potatoes, ranked highest among the three, coming in at number 2,440. Its growth year-over-year growth was pegged at 163 percent, according to Inc.’s website; its annual revenue was listed as $127.5 million.

Stria, a business process outsourcing company specializing in document management, ranked 4,350th with 70 percent growth and revenues of $6.1 million.

Grapevine is an information technology management firm with revenues of $4.8 million per year. Its 57-percent growth rate landed it 4,830th on the Inc. ranking.

https://www.bakersfield.com/news/three-kern-companies-make-the-inc-list-of-fast-growing/article_18d4a54c-c45d-11e9-b615-2be90d1e5eca.html

Amazon acknowledges new facility north of Bakersfield

By John Cox

The Bakersfield Californian

August 15, 2015

When Amazon was trying to get approval to build a massive distribution center next to Meadows Field Airport, the company’s approach was so stealthy that senior Kern County officials reviewing its permit application did not know they were actually dealing with the Seattle-based e-commerce giant.

Even after county officials told reporters one year ago this month that Amazon was coming to town, the company known for its secrecy chose to remain publicly silent about its plans for Kern.

All of that ended with an email exchange Thursday.

“Amazon absolutely acknowledges this project,” spokeswoman Shevaun Brown wrote to The Californian, “but we do not have any new information at this time.”

She was unable to provide a projected opening date or a time when the company will begin hiring people to work at the four-story building that has been under construction since October along Merle Haggard Drive. But she did confirm some details that have already been reported, clarify a misperception and fill in some important blanks.

The company, Brown noted, intends to employ 1,000 full-time, full-benefit jobs when it opens the building, which she said measures 640,000 square feet.

That last detail comes as something of a surprise. Several people have estimated the building’s size at 2.6 million square feet. But that assumes each of the four floors will offer the same amount of floor space, which apparently it will not.

County records suggest the building will house robots that will assist in the distribution process. Their towering presence will reduce the amount of interior floor space considerably. But it is still a massive building and one of the largest in Kern County.

Most of the jobs there will support “order fulfillment,” Brown wrote: “picking, packing and shipping items to customers such as books, small electronics, school supplies and home goods.”

She said there will also be jobs supporting the building operations in the areas of human resources, information technology and management.

Employees at the site will earn a minimum of $15 per hour and have access to comprehensive medical, vision and dental insurance “starting on day one,” Brown wrote.

They will also be able to enroll in a retirement savings plan, a program allowing employees to share their paid leave with their spouse or partner, and prepaid tuition covering 95 percent of the cost of courses related to in-demand fields “regardless of whether the skills are relevant to a career at Amazon,” she added.

Although she was unable to state when the plant might open for business, she did say hiring typically begins one to two months before operations commence — and that this launch typically takes 18 months to two years after the project is announced.

This timetable could suggest the building will begin distribution work sometime between February and August of next year.

The email exchange concluded with an implicit call for patience on the part of job-seekers.

“Even though a building may look finished on the outside,” she wrote, “we’re likely still constructing the different floors, etc.”

https://www.bakersfield.com/news/amazon-acknowledges-construction-project-north-of-bakersfield/article_91f52e16-ba3e-11e9-aacd-d3c1350830ef.html

Central Valley Continues to Charm Logistics Buyers

sf-prologis.jpg

STOCKTON, CA—Newport Beach, CA-based CT purchased the 345-acre industrial site for the 4.4 million-square-foot NorCal Logistics Center in May 2017 and has now completed the first phase development, including three spec buildings. The last to be completed is a 1.12 million-square-foot building, one of the single-largest speculative industrial buildings in Northern California. The second phase of development will begin toward the end of 2018 and include three additional buildings totaling approximately 1.6 million square feet.

The first two buildings in phase one totaling 575,127 square feet have been sold to Prologis for $47 million. Prologis paid approximately $82 per square foot for the buildings, which were unleased and in shell condition at closing.

“These transactions reflect the high demand for world-class logistics facilities in major distribution markets nationwide,” said Carter Ewing, managing partner of CT. “The speed with which these buildings transacted following completion mirrors the strong interest we are experiencing in several other projects we currently have underway. In this case, the transaction allows Prologis to enjoy a fair profit on their investment going forward while providing CT with a sizeable return and well ahead of schedule; a true win-win.”

Prologis’ interest in the Central Valley is well known. As of the end of 2017, it has taken ownership of 31 buildings, approximately 15 million square feet, and is projected to continue producing oversized returns.

CT was represented in the sale by Kevin Dal Porto, Blake Rasmussen and John McManus of Cushman & Wakefield. Prologis was self represented.

NorCal Logistics Center is home to General Mills, KeHE Foods, Allen Distributors and Fox Head, and is in the heart of California’s Central Valley, a 185 million-square-foot industrial market. The region is an extension of a global logistics supply chain infrastructure directly linked to West Coast ports in Oakland/Stockton, Los Angeles/Long Beach, Portland, OR and Seattle/Tacoma.

Since its establishment in 1994, CT has completed more than 300 transactions valued at more than $3 billion. CT has acquired more than 2,000 acres of industrial land since 2010, and the company is primarily focused on the investment of class-A US industrial logistics developments. CT has active developments in Southern California, New Jersey and other East Coast markets. CT has more than 10 million square feet under development and another 10 million square feet in its development pipeline.

For example, CT is in development on logistics centers near Chicago, Atlanta and in the Dallas/Fort Worth metroplex, where the company last month announced the development of Oakdale Logistics Center in Grand Prairie, TX. The company plans to announce three new development projects in the next few months, further extending its nationwide logistics footprint.

Nationwide, industrial vacancy stands at 7.3%, the lowest since first quarter 2001, according to the first quarter 2018 CBRE US industrial availability index. The first quarter 2018 construction totaled 35 million square feet with absorption at 41 million square feet. This is the 32nd straight quarter of positive absorption. The drivers of supply chain demand–consumer consumption, business inventories, industrial production–all showed growth in first quarter 2018. Consumer consumption is directly linked to demand for warehouse and logistics real estate, which is fueling investment and development activity. PREA’s fourth quarter 2017 consensus forecast survey projects a 7.1% return for logistics real estate from 2017 to 2021; more than apartments, retail or office, GlobeSt.com learns.

Originally appeared in GlobeSt

https://www.cbicommercial.com/blog/2018/7/6/central-valley-continues-to-charm-logistics-buyers