CT REALTY PLANS NORCAL INDUSTRIAL PROJECT
Newport Beach-based CT Realty Investors is planning one of the largest speculative industrial developments in Northern California in years after buying a big chunk of land in the Central Valley city of Stockton.
The privately held company, one of Orange County’s biggest developers and investors, recently closed on a 345 acres at NorCal Logistics Center, a large master-planned industrial campus about 75 miles east of the Port of Oakland.
The site takes up a majority of the 474-acre center, which was previously called Opus Logistics Center. The last construction there was before the recession, when the site’s prior developers, Minnesota-based Opus Corp., went bankrupt.
It’s near the inland Port of Stockton and Burlington Northern Santa Fe’s intermodal rail yard, one of the rail company giant’s largest area facilities.
Existing rail and intermodal facilities link ports in Northern California with counterparts in Los Angeles and Long Beach, as well as other key locations in the western U.S.
Terms of CT Realty’s purchase haven’t been disclosed. Industrial-zoned land in the Central Valley has been selling on average for only a few dollars per square foot, according to local news reports, well below Orange County levels. A price of $50 million or less is likely, based on other comparable deals in the region.
CT Realty said it plans to develop 4.4 million square feet of high-clearance distribution, e-commerce/logistics and advanced manufacturing buildings. The project’s first phase of three buildings totaling 1.7 million square feet breaks ground this month, and the developer estimates construction will cost $135 million.
The largest of the three buildings will be a little more than 1.2 million square feet, the single largest spec industrial building ever developed in Northern California, according to CT Realty.
Buildings planned in future phases will range from 100,000 square feet to 1.9 million square feet, some of which will be build-to-suit projects, the developer said.
“We view this as a long-term development opportunity to assemble a world-class logistics campus in one of the strongest markets in America,” said CT Realty Managing Partner Carter Ewing.
The industrial market in California’s Central Valley region totals about 185 million square feet, and activity there mirrors “the favorable activity we have encountered over the last three years in Southern California and other major distribution markets in Dallas, Atlanta and Chicago,” Ewing said.
7M SF of Deals
The Stockton acquisition is the largest industrial deal CT Realty’s announced in four years, when they bought 530 acres in Texas in a deal with Seal Beach-based Xebec Realty Partners. That site, about 12 miles south of downtown Dallas, is operated under Port Logistics Realty. Nearly 4 million square feet of space is being built in the project’s first phase, which carries an estimated $500 million price tag.
Other investors in Port Logistics Realty include Diamond Realty Investments Inc., a subsidiary of Mitsubishi Corp. in Japan, and several wealthy Orange County investors.
Diamond Realty Investments is also involved in financing the Stockton project, which is being designed by Irvine-based Ware Malcomb. Construction financing is being provided by Cal Bank & Trust and Fifth Third Bank.
The Stockton acquisition “represents the calculated expansion of an industrial logistics strategy we began implementing aggressively across the country five years ago,” said CT Realty Managing Partner James “Watty” Watson.
The real estate company said it has bought or developed 7 million square feet worth of industrial buildings in the U.S. over the past 36 months.
Its main current OC project is a healthcare-focused multiuse development on 25 acres in Aliso Viejo.
NorCal Logistics Center’s existing buildings already have some OC ties; Irvine-based Fox Head has a facility there, along with occupants General Mills and Fresh & Easy.