Key news for the economic development leaders and policy makers in the Tri-Valley cities: if a major manufacturer wanted to locate a facility here, there’s no zoned parcel large enough that is available.
That’s the word from David SCARPINATO, an industrial land broker, speaking to attendees at the Hoge Fenton law firm’s real estate update. Gillig, the nation’s leading bus manufacturer, has been based in the Bay Area for its 131-year history. In 2017, it moved into three buildings totaling 677,000 square feet in Livermore. The parcel was nearly 40 acres.
When it moved, Gillig was employing more than 900 people at the Livermore facility. And, it generates a pile of sales tax for the city of Livermore.
In short, it was a home run for all concerned.
The current challenge, with the vacancy rate for industrial buildings at about 4%, is there’s not another parcel that could accommodate a similar manufacturing operation. Scarpinato said that there are only four buildings with 50,000 square feet available as warehouse or manufacturing space in the market.
That theme contrasted sharply with the outlook for office. Dan Watson, the executive manager at Newmark, talked about the “antiquated” office buildings in the Tri-Valley that were ripe for redevelopment. Heading the list is the 90-acre Chevron Park which the energy company sold back to Bishop Ranch owner, Sunset Development Co. Chevron leased 400,000 square feet elsewhere in Bishop Ranch to maintain its headquarters in San Ramon while relocating jobs to Houston.
Sunset already has rezoned land in the park for 4,500 residential units in its core park as well as building the City Center shopping, entertainment and dining hub for its vision as a mixed used facility. It is just starting to work with the city on a plan for the Chevron parcel, but expect plenty of housing. Watson repeated what the Summerhill Homes president said earlier its interest list for the parcel it is building in Bishop Ranch was the highest ever for a project.
Watson and Hoge Fenton attorney Sblend Splendorio both commented on the return to work. Watson observed that there’s a direct correlation between layoff announcements—of which there have been many in recent weeks in the tech sector—and card keys being swiped at offices. Workers have grown accustomed to the freedom of working from home, but managers believe that they’re not as productive as when they’re in the office. That requires a different working space that older office buildings lack, thus the redevelopment opportunity according to Watson.
Given that all three panelists as well as audience members cited the need for more housing—it’s a key consideration for executives when considering sites for their businesses—expect to hear more about that and older buildings being transformed into housing sites such as the proposal for the Marketplace shopping center.
Watson also shared an interesting idea based on his work in the life sciences sector. The consensus was that the Tri-Valley was not yet a “hub” but moving in that direction with its combination of home-grown companies such as 10X Genomics and Unchained Labs with international firms such Abbott, Roche and Thermo-Fisher.
The San Francisco Business Times morning newsletter Wednesday noted that five 10X Genomics alums had founded Infinimmune in San Ramon and Alameda and obtained $12 million in seed funding. Remember that 10X founders came out of Lawrence Livermore National Lab so this represents a third generation of companies—growing toward a hub.