Case Study

Summary

Longfellow Logistics Center is located within the National Business Park in Livermore, and is part of a larger submarket referred to as the Tri-Valley.  The property benefits from convenient access off of I-580.  The property is situated upon 34 acres of land consists of one large warehouse buildings totaling 612,300 SF.  Longfellow Logistics Center is strategically located 34 miles from Port of Oakland and 45 miles from San Francisco.  The property benefits from 32’ clear height, ample parking stalls for cars and trailer storage, ESFR sprinkler system, and has the potential for rail service by Union Pacific.  Given the overall size of the property, it is one of the five largest logistics facilities of its kind within the Bay Area.

Situation

  • In 1999, the property was constructed by IDI as a build-to-suit for Circuit City.
  • In 2008, Circuit City filed for bankruptcy protection, and the property was subsequently taken into receivership.
  • In 2009, the property was acquired by an owner/user, and operated as a regional fulfillment center by OA Logistics.
  • In 2017, OA Logistics outgrew the property, and made the decision to sell and leaseback the property for two years so it could build a larger facility in Tracy.

Results

  • Since its inception, the Tri-Valley industrial submarket had been perceived as a tertiary market within the East Bay, with institutional investors favoring warehouses located along the I-880 industrial corridor. 
  • With limited land sites remaining for industrial development within the Bay Area, Orchard Partners had been acquiring property in outlying industrial submarkets, including American Canyon (Napa) and Fairfield.
  • When the opportunity to buy Longfellow Logistics Center off-market arose, Orchard Partners found it compelling given the significant discount to replacement cost, short-term leaseback, and divisibility for multi-tenant occupancy.
  • On a relative basis, growing scarcity of large warehouses exceeding 200,000 SF helped this segment perform very well within the Bay Area.
  • Bolstered by these observations, Orchard Partners acquired the property off-market with AIG, in Sept 2017.
  • Concurrent with the two year leaseback with OA Logistics, the property was financed with MetLife and marketed for lease.
  • Following lease expiration of OA Logistics, the property was renovated, including the addition of a large paved trailer yard on the east side, painting of the interior and exterior of building, and new landscaping.
  • In Sept 2019, the property was leased long-term to a major e-commerce company.
  • Ownership received several unsolicited proposals, and ultimately made the decision to sell the property to Bentall Green Oak.