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7/29/22
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A joint venture between Intercontinental Real Estate Corporation and Kennedy Wilson has acquired Stockton Industrial Park, an 877.6k sf manufacturing and distribution facility in Stockton, CA, for $84 mil ($96/sf). The property was sold by a New York-based owner and operator of logistics real estate.
Located at 1604 Tillie Lewis Drive in the largest industrial submarket in California’s Central Valley, the facility is situated on nearly 40 acres off of State Route 4, just five minutes from I-5 and the Port of Stockton. The property is also conveniently located near several major railways, including Stockton Terminal & Eastern Railroad, UP Intermodal and BNSF Intermodal, as well as Stockton Metropolitan Airport. Stockton is ideally located with direct truck access, both north-south via I-5 and State Highway 99 and east-west via I-205, I-580 and I-80, allowing service throughout California, Nevada and other western states.
Consisting of three highly functional and easily divisible buildings, Stockton Industrial Park features 24’ to 28’ clear heights, ample dock-high and grade-level loading and a wide range of unit sizes for warehouse and/or manufacturing purposes. The largest of the buildings, totaling 570k sf, offers direct rail service.
The property was 100% leased at closing with a weighted average lease term of approximately 2.5 years and rents 27% below market rates, providing significant upside in rental growth. Industrial supply in Stockton remains tight, with only 5% vacancy across industrial assets.
“Combine the continued expansion of e-commerce with today’s supply chain that is being pushed for better positioning and performance, as well as a Central Valley industrial market that was second nationally in rent growth, and it’s easy to see what an opportunity this was to acquire a high-quality, well-located industrial and logistics property primed to further capitalize on these trends,” said Jessica Levin, Senior Director, Acquisitions at Intercontinental who led the acquisition.
Stockton Industrial Park represents Intercontinental’s 35th industrial acquisition, bringing the Boston-based private equity real estate firm’s holdings to more than 11 million square feet of industrial space.
“Stockton Industrial Park is positioned very well to benefit from all the major drivers of a burgeoning industrial sector, including the vast consumer demand of the country’s most populous state,” added Allen Logue, Director, Acquisitions at Intercontinental. “With rents 21% below market, its value-add potential makes it that much more a prize in our expanding industrial portfolio.”
CBRE’s National Industrial Partners Team, led by Barbara Perrier, Darla Longo and Rebecca Perlmutter, along with Blake Rasmussen and Tyler Vallenari of Cushman and Wakefield, marketed the property for sale on behalf of the seller.
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