A Tennessee developer has listed a 250,000-square-foot warehouse in Sonoma County after Amazon.com backed out of its lease.
McNeill Real Estate Services, based in Nashville, is listing the property for lease or sale at 22801 8th Street East, about 4 miles south of Sonoma, the San Francisco Business Times reported. The price for the 19-acre property was not disclosed.
The e-commerce company had signed a 10-year lease in 2020 for the property known as Victory Station, which it intended to use for last-mile deliveries. But then Amazon bailed from the property this spring after failing to obtain operational permits from the county.
Victory Station is one of the few large blocks of industrial space — if not the only such block — currently available in the North Bay, according to Brooks Pedder of Cushman & Wakefield, who joins Tony Binswanger and Bo Harkins as the listing agents for the developer.
Jose McNeill, CEO for McNeill Real Estate, declined to give a price for the facility. but said his firm will seek lease rates between 90 cents and $1 per square foot.
“The cost to develop a project like this has moved up significantly, as have interest rates and land prices,” McNeill told the Business Times. “To deliver a similar project now would take a number of years.”
The 49.9 million-square-foot Napa-Solano industrial market has a vacancy rate of 0.33 percent, said Pedder of Cushman & Wakefield. That’s down from 0.6 percent in the second quarter, a decrease Pedder attributed to a trio of large deals over the last few months.
McNeill Real Estate built the warehouse in 2018. Amazon then planned to lease what would be its first warehouse in Sonoma County in the spring of 2020, saying it wanted to invest $15 million in the facility in time for the 2020 holiday season.
But Amazon, hindered by environmental rules and pushback from the community, couldn’t obtain the necessary permits. It exited its lease for Victory Station last April.
The Amazon departure came weeks before it announced it would seek to curtail leasing activity across its industrial portfolio, which the company said was saddled with excess capacity.
Amazon put three East Bay industrial properties totaling 950,000 square feet up for sublease this year, while backing away from a build-to-suit project in San Leandro.
— Dana Bartholomew
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