According to a new report from Colliers International’s Fairfield office, which covers Solano, Napa and parts of Contra Costa counties, new construction of industrial buildings continues to be driven by low vacancy rates.
The combined industrial vacancy rate for Solano and Napa counties now stands at 5.7 percent, down from 6.4 percent in the prior quarter.
Napa’s office vacancy rate experienced a slight uptick from 9.4 percent to 10.3 percent amid limited activity.
American Canyon experienced an industrial vacancy rate increase of 1.4 percentage points in the third quarter, however it remains low at only 1.6 percent.
This increase was attributable to the completion of a 120,080 square foot warehouse at 100 Jim Oswalt Way.
The largest sale in the region covered in this report took place in American Canyon as RAR2 Napa Logistics Park. RREEF America purchased the 646,000 warehouse occupied by IKEA and located at 1 Middleton Way in the Napa Logistics Park. The price was $90.4 million.
According to Colliers International, economic growth throughout the region is one of the drivers of the continued low vacancy rates and high levels of construction. Some of this region’s leading businesses, such as the food, wine and e-commerce industries, are growing at an even faster rate than the economy.
There was an increase in sales of office properties in Solano and Napa counties in the third quarter of 2018.
There were three sales of greater than 15,000 square feet in a quarter for the first time in two and a half years. At the same time, leasing activity in the office market remained quiet as vacancy increased from 15.4 percent to 16.5 percent.
“Napa County’s economic strength continues to be driven by its status as a world renowned wine region,” said Phil Garrett, executive managing director of Colliers International’s Fairfield office.