Case Study

Summary

Beck Logistics Center is located within the Solano Business Park of the North Bay submarket, with convenient access off of I-880. The property is situated upon 14.31 acres of land consists of one large warehouse buildings totaling 231,821 SF. The city of Fairfield is strategically located at confluence of I-880, I-680 and Hwy 12, and is equidistant between the Port of Oakland and Sacramento.  The project benefits from 64’ clear height, a large yard area for trailer storage, and rail service provide by Union Pacific. Given the overall size of the property, it is one of the largest logistics facilities of its kind in the Fairfield submarket.

Situation

  • The property was constructed by Bedford Construction in 1987 for Breuner’s Department Stores (a wholly owned subsidiary of BAT Industries).
  • Within a few years of its completion, Breuner’s filed for bankruptcy protection, and the property was subsequently sold through receivership to Fiberbond.
  • About 2006, Fiberbond sold the property to Jensen Precast, as a regional facility for its business.
  • In 2012, Jensen made the decision to sell the property and vacate.
  • The property was marketed for more than two years before Orchard put the property into escrow in December 2014.
  • Due diligence was protracted due to an environmental condition at the property.

Results

  • Concurrent with its due diligence, Orchard commenced marketing the building for lease, with interest from several tenants.
  • Because of its previous experience with Strategic Materials, Inc. (SMI), Orchard began to test-fit the building for their relocation from San Leandro.
  • SMI is the largest glass recycler in North America, and the Bay Area is one of its strongest markets.
  • SMI’s relocation requirement was dependent upon rail service, and at the time, the property was the only viable option.
  • Orchard worked with SMI to construct a renovation budget of the facility, including reactivation of the rail spur, significant building and site upgrades.
  • Prior to closing, Orchard successfully negotiated a 15 year lease with SMI and long-term fixed rate financing.
  • Orchard closed on the property and took the environmental risk, and obtained no further action letter post-closing.