A second distribution center for Amazon in south Fresno cost $41 million for a lease, making it No. 1 on a list of Largest Commercial Real Estate Transactions. Photo by Edward Smith

published on February 7, 2022 - 2:13 PM
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The Business Journal has published its annual list of Largest Commercial Real Estate Transactions, including leases and sales in retail, industrial, investment and office space. Data were compiled using reports from some of the area’s biggest brokers. Here are the stories of the top two.

The big one

The biggest transaction of 2021 represents the growing demand nationwide for warehouse space. A lease to occupy the nearly half-million square-foot warehouse space in south Fresno cost $41 million. Ethan Smith, senior vice president with Newmark Pearson Commercial in Fresno, brokered the deal between the undisclosed tenant and G4 Enterprises on March 1, 2021. Permits filed with the City of Fresno list Amazon as the tenant. This would be Amazon’s second facility in the Northpointe Business Park.

“From the perspective of the actual building itself, it’s considered to be a modern, Class-A logistics property,” said Smith.

Advancements in engineering and fire suppression systems have allowed logistics buildings to be much taller than they’ve traditionally been, Smith said. With 36-foot clearance to the lowest point in the ceiling, this means more inventory can be stored in a building. The industry standard for a long time has been 32-foot ceilings.

Logistics companies such as Sally’s Beauty Supply, Ulta or Amazon don’t find square footage as valuable a metric as cubic footage, said Smith. 

Gone are the days of warehouses being staffed with minimal crews, Smith said. Moving the amount of inventory that modern logistics companies do requires robotics and a lot of labor to be able to receive and send packages efficiently.

Getting the building assembled took meeting with residents of South Central Fresno. Representatives of the roughly 150 homes in south Fresno complained about the impact logistics companies had on the neighborhood — from dangerous streets to loud noise from constant truck traffic and bright lights from signs. Developers with G4 Enterprises agreed to create a $300,000 community benefit fund to help mitigate light, traffic, noise and air quality impacts. Approximately 100 homes would receive double-pane windows, better insulation and upgraded air conditioning to help reduce harms. For the city’s part, they agreed to install crosswalks, sidewalks and lighting in the neighborhood. The City of Fresno also agreed to waive $250,000 in impact fees to help finance the fund.

Times Square

Rounding the third spot for the largest transaction is one departed from the industrial world. Fresno’s Times Square Shopping Center sold Aug. 25, 2021 for $16.25 million to father-son duo Marvin and Brian Dole of Vintage Properties from Times Square Holdings LLC. Michael Kennedy and Michael Arfsten of Retail California and Brett Visintainer of The Visintainer Group both represented the buyer.

Both Marvin and Brian had wanted for some time to come into the Fresno market, they had said in a previous interview.

It was that desire that made them stand out, said Visintainer.

The property was listed off-market and owners had told brokers to come up with a short-list of prospective buyers. They had come up with a list of potential buyers who could work with value-added property.

And for a multi-million dollar property not anchored by a grocery store or pharmacy, it garnered seven to ten offers, said Visintainer, a lot for an off-market property.

Many of the bidders saw the risk in the neglected 120,000-square-foot-shopping center at Shaw and Marks avenues. Not only would it cost millions to purchase, but also it would take capital to revitalize it, as many of the centers in the area have had done to them.

With a good location and opportunity for broad tenant mix, “they saw the opportunity,” said Visintainer.

“It’s a long list of what’s needed,” said Arfsten in a previous interview. The center needs to be repainted and have some landscaping done, to name a few. 

But the center has good location with plentiful rooftops and a broad demographic base to attract foot traffic. 

“West Shaw is still a retail destination,” Arfsten said. The problem is the center has been lost in the shuffle. Across the street, Ami Winepress, anchored by Target, received a significant upgrade and other shopping centers have had consistent remodels throughout the years, Kennedy said.

Brian and Marvin said they already plan on investing between $1 million to $2 million back into the center, replacing facades and doing parking lot work, including repairing a prominent clock tower. 

The Doles plan to begin the remodel this year, according to Arsften. Since closing the purchase, two leases have already been signed, totaling 10,500 square feet. They have also garnered interest in the former Big Lots space, which would bring a second anchor and more traffic to the center.

They don’t expect to see any return for at least three years, Brian said.

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