Lab Supplies Provider Picks Fresno Area for New 500,000-SF West Coast Distribution Center

August 20, 2010
By Barbra Murray, Contributing Editor

VWR International Inc. has selected a site in Visalia, California for its new West Coast distribution center. The global laboratory supplies provider will build a 500,000-square-foot facility on land located approximately 40 miles southeast of Fresno.

“Selecting a location for a new West Coast distribution center was the result of careful review of many factors; it was critical that the new site be strategically located to enhance current and future customer service needs,” John Ballbach, President and CEO of VWR, noted in a prepared statement. “In addition, it will also provide a great setting for our associates to work and live.” The company’s new facility will be operational in 2012.

Had VWR opted to lease instead of build, it may have been able to find quite a deal in Fresno, as conditions have forced most landlords to be more pliable in lease negotiations. Vacancy rates have consistently inched higher for the last eight quarters, reaching 10.1 percent in the second quarter of this year, according to a report by real estate services firm CB Richard Ellis. Additionally asking rental rates remain on the decline, a trend that has existed for the last 30 months.

Landlords’ bread and butter during the recession has taken the form of short-term deals featuring a bevy of concessions, but good opportunities exist for tenants seeking deals of 5,000 square feet and beyond. “Landlords are willing to provide tenant improvement dollars for longer term deals and are utilizing longer amortization periods to recover costs, many beyond the initial lease term in order to keep rental rates affordable and competitive,” as per the report.

While most U.S. manufacturers–hobbled by the global economic crisis–curtailed or canceled expansion plans long ago, VWR’s pursuit of additional accommodations comes as little surprise given that the company’s product line caters to many top pharmaceutical and biotech companies.

It’s all linked to healthcare reform. As per a study by Fitch Ratings, the need for manufacturing space, lab space and related space for healthcare product producers will go on the rise as the healthcare industry grows to accommodate the addition of the 32 million currently uninsured Americans to the healthcare system.