Prologis Inc PLD will break ground on a 231,660-square-foot building as part of the Oakland Army Base redevelopment plan, according to a news from San Francisco Business Times. Construction of the facility, which is the second building of the project initiated by the company in 2016, will likely conclude by the first quarter of 2019.
The first phase of development work, for a 256,210-square-foot building, finished last October. The building has been leased to a personal storage company, PODS.
The new building will have 32-foot-high ceilings, 59 trailer parking spaces as well as 239 parking spaces. Further, the location of the building is extremely favorable as the tenants will be able to bring goods by utilizing the Port of Oakland, situated across the street, along with three interstate highways located near the site.
Tenants are giving increased importance to these facilities as it can serve both as a last mile and first mile property. Thus, the company expects higher rental rates than the industry due to these facilities and the location advantage.
Dan Letter, managing director of capital deployment in the Northwest for Prologis informed, “The fact that we’re going vertical on these buildings now has been in the works for over a decade.” He further added, “It’s right down the fairway of our corporate strategy, which is to continue to push into the urban core where consumption is rising the fastest.”
The entire site will span across 675,000 square feet, with three buildings of warehouse and logistics.
Specifically, amid e-commerce boom, recovering economy and job market gains, elevating consumption levels, and healthy manufacturing environment; the demand for warehouse and logistics real estate is anticipated to remain robust. This, in turn, is offering significant impetus to industrial real estate investment trusts like Prologis, Duke Realty Corporation DRE and Liberty Property Trust LPT to flourish.
Particularly, with a large customer base, companies are shifting their strategies toward same-day delivery and other services, which are propelling demand for modern distribution facilities. As a result, last-mile properties are witnessing a solid increase in asset values and Prologis remains well poised to take advantage of this trend.
In line with its efforts to capitalize on the favorable conditions surrounding industrial real estate markets, in April 2018, Prologis entered into a definitive agreement with DCT Industrial Trust Inc. DCT to acquire the latter in an $8.4-billion stock-for-stock deal, including debt assumption. Notably, the deal, which is anticipated to create near-term synergies of nearly $80 million, was unanimously approved by both companies’ board of directors.
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