USAA Buys 916 KSF Industrial Portfolio in California’s Central Valley

By Gail Kalinoski, Contributing Editor

USAA Real Estate Co. has acquired two Class A modern bulk warehouse distribution properties totaling 916,035 square feet in Stockton, Calif., in a bankruptcy process.

The company did not release the purchase price but The Registry, a Bay Area real estate news site, reported the properties were sold for $51.5 million. USAA Real Estate was the successful stalking horse bidder of the sale of assets in a bankruptcy. The firm’s joint venture partner is Seefried Properties of Atlanta.

“The Stockton Industrial Portfolio represents a compelling opportunity for USAA to add value to two outstanding and versatile industrial properties located in California’s Central Valley,” Len O’Donnell, USAA Real Estate’s CEO, said in a news release. “We are very pleased to yet again be working with Seefried Properties as our joint venture partner and the team is very excited about our ability to execute on this transaction on an off-market basis through the bankruptcy sale at a significant discount to replacement cost.”

CBRE’s Industrial Real Estate team consisting of Tyson Vallenari, Blake Rasmussen, Kevin Dal Porto and Ryan McShane, represented USAA in the portfolio transaction. The CBRE group is also the listing team for both properties.

The larger of the properties is a 750,560-square-foot building in Newcastle Logistics Center at 4650 New Castle Road. The second property, with 165,474 square feet, is in the Performance Center at 834 Performance Drive. The assts were built between 2008 and 2009.

The Newcastle Logistics Center property has 30,000 square feet of freezer space and 190,000 square feet of cooler space. It has 500,000 square feet of dry storage space and 32,000 square feet of office space in three locations. It has 15 acres, which could be built out or accommodate future parking. Originally build to serve the previous owner’s warehouse and distribution needs for Northern California, the property is close to I-5, Highway 99 and less than one mile from the BNSF intermodal yard.

Performance Logistics Center was originally built as a speculative, multi-tenant warehouse and distribution center. It has 500 square feet of office space and about 165,000 square feet of warehouse and distribution space. The property has an adjacent 2.5-acre lot that can be expanded for car or trailer parking.

Justin Hildebrandt, executive director of USAA Real Estate’s Northwest Region, noted that Stockton is in demand as a distribution point for industries in Northern California because it is less than two hours from the Port of Oakland and most of the Bay Area.

“Both of the buildings are occupancy-ready, institutional-grade bulk distribution centers that are well positioned to capitalize on positive regional market fundamentals and generate strong interest from tenants and real estate investors alike,” he said in the USAA Real Estate news release.

USAA Real Estate Co., based in San Antonio, Texas, is the real estate investment arm of USAA, a financial services company. Atlanta-based Seefried Properties is a privately owned firm that specialized in development, leasing and management of industrial properties. The two firms announced last month that they were developing a four-building, 2.3 million-square-foot speculative industrial park on 157 acres in the Dallas-Fort Worth area. USAA Real Estate is also constructing a 604,565-square-foot speculative industrial building in North Aurora, Ill., with The Opus Group.