Amazon Lease Transaction Caps a Strong 2019
The Tri-Valley industrial market finished an already strong 2019 with a very significant lease transaction to Amazon. The overall vacancy rate decreased significantly over the past 90 days by 34 percent, from 6.7 to 4.4 percent. The year-to-date net absorption ended on a very positive note, with 435,295 square feet absorbed for the year. These are significant numbers, compared to the end of 2018, when the year ended with 4.9 percent vacancy and a negative 670,740 square feet (due to so much new spec construction in the market). Additionally, the Tri-Valley industrial market absorbed a gross, 1,544,350 square feet, compared to last year’s 573,422 square feet. Most of this significant year-end activity was the result of a 610,813 square foot transaction at the Longfellow Logistics Center in Livermore (formerly the Circuit City distribution building). Orchard Partners signed a long term lease with Amazon to occupy the entire premises to provide one-day service to the Greater Bay Area from this location, backing up the extensive warehousing and distribution operation that Amazon has amassed over the hill in the Central Valley. While this property was on the market for close to two years, the previous tenant did a month-to-month sale/leaseback with Orchard Partners previous to this lease execution. Livermore has generally one hour stem times to most of the Greater Bay Area from this location, as well as access to affordable housing and labor force in the not too far away Central Valley.
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