A new industrial development is being planned in Sacramento — a bit removed from the typical industrial areas.
Irvine-based private real estate company Panattoni Development Co. is planning to build 180,000 square feet of industrial space in North Natomas, a few miles away from Metro Air Park, where Amazon has a major local distribution center.
The upcoming project would include two buildings on 11.5 acres at 3900 Duckhorn Drive, south of the Arena exit from Interstate 5. Local real estate investment firm Alleghany Properties currently owns the site.
Sacramento Business Journal Editor-in-Chief Adam Steinhauer said the industrial sector has been hot in Sacramento for a few years, and particularly over the last year during the pandemic.
“It's unusual to see something of this size, though, away from, say, Metro Airpark while also north of town or McClellan Business Park,” he said. “Those are big industrial areas.”
The Duckhorn Advanced Manufacturing and Logistics Center would be intended for high-tech manufacturing and light industrial uses, according to plans filed with the city of Sacramento. The planned two buildings could be divvied up for multiple tenants.
Currently, the projects are speculative, meaning they are being built without tenants lined up before construction. However, just north of the site is an approved 368-unit apartment complex, where grading work has started before construction.
Steinhauer joined CapRadio’s Mike Hagerty to discuss more about the future industrial space.
This interview has been edited for clarity and length.
On the planned size and use of the Panattoni industrial space
[The space is] about 180,000 square feet … it’s unusual to see something of this size away from Metro Airpark while also north of town or McClellan Business Park. Those are big industrial areas. This is a bit removed from that.
[Panattoni is] describing the uses in the documentation they filed with the city as a high-tech manufacturing or light industrial use. An executive of Panattoni we spoke with said that they finished a similar development in the Bay Area and that they’ve leased it to Facebook’s Oculus Rift division and to a biotech company. So relatively high-end uses they have in mind for this.
On the upswing in the industrial market
[The market] had been booming before [the pandemic] with the growth of Amazon and e-commerce in general. But the pandemic and people choosing to shop from home really supercharged it.
So it really is pretty much the hottest sector of commercial real estate in the Sacramento area at the moment.
On a new housing complex planned near the future industrial site
An apartment complex of 368 units is approved just to the north of the site of this development. Grading’s underway before construction to start with that.
It's an interesting area in that it isn't particularly an industrial area. Just next to that was a proposed retail development that didn't go anywhere — that the city didn't approve — in part because of neighborhood opposition.
The folks at Panattoni told us that they've reached out to community groups in Natomas, and they've gotten a favorable response for their project, even though it isn't of the residential variety you normally see around there.
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