Diversified Development Group is among a growing number of developers erecting millions of industrial space on spec near the Visalia area. File photo.
Written by John Lindt
Two more massive, speculative industrial buildings got City of Visalia permits in recent weeks. Fresno’s Diversified Development Group (DDG) will build a 244,280 square-foot concrete tilt-up building at 2520 N Plaza Dr., and a second 120,000 square-foot building next door at 9105 W Riggin Ave., both located at the southeast corner of Riggin and Plaza. The site is across the street from the huge 88-acre United Parcel Service hub under construction now.
On the same piece of dirt, DDG plans two more buildings, 188,4000 square feet and 144,000 square feet, all clustered on 35 acres.
This is just the latest in a growing list of industrial developers ready to fund big construction projects and land purchases ahead of any firm commitments by tenants.
The largest of these buildings is a 1.1 million square-foot behemoth on the drawing board that is expected to be built early next year right next to the UPS complex. The project is being proposed by LA-based CapRock Partners, which has the only 1 million square-foot spec building in Southern California as well, notes company principal Pat Daniels. Like that Los Angeles-area spec project, Visalia too will be built putting their money where their hunch is. That hunch is that if they build it in Visalia, someone will show up to fill it.
Industrial real estate agent Nick Audino believes “UPS launched all this interest, made stronger by a very low vacancy rate in the Visalia Industrial Park.” As for the big CapRock building, Audino says, “you just got to give them a good chance to lease it.”
The low vacancy rates here have been highlighted by a 2018 Colliers study suggesting that the vacancy rate in the Visalia Industrial Park has dropped from 5% in 2013 to half that in early 2018.
Diversified Development Group itself has pioneered the strategy for years, building three large spec buildings next to Visalia’s largest private employer VF Corp. (1,200 workers strong) in 2018, and quickly filling them up.
For the past few decades, DDG has built several complexes adding up to about 2 million square feet in Visalia, with one large cluster of buildings close to Plaza Drive and Highway 198. The firm manages more than 8 million square feet of industrial properties from Visalia to Fresno — more than 45 buildings.
DDG is looking a few years out with plans published to build 2.8 million square feet in eight buildings on 150 acres purchased from the Doe family on the northwest corner of Plaza and Riggin — clearly Visalia’s hottest address.
Now there is a new player in the spec game. YS Holdings Inc, LLC has purchased 38 acres in the Visalia Industrial Park and is building two 300,000 square-foot buildings near Kelsey Street and south of Riggin Avenue close to the new Millipore Sigma building under construction now. The two buildings are being permitted by the City of Visalia. Construction is set to begin in the first quarter of 2020, said veteran Visalia builder Basil Perch, the contractor on the job.
While the buildings are spec, at least one is likely to be used by the developer for one of his companies, say city sources.
All of this construction is helping the permit values to go sky high in Visalia. Right now new commercial valuation is up over 200% this year so far to nearly $50 million.
If you need a spec building in a slightly smaller size, architect Thom Black has an 87,000 square-foot warehouse building available on Sunnyview Avenue. Several developers have 25,000 square-foot spec buildings for lease and others like Pickett Construction build in a 5,000 square-foot size for smaller business operators.
Realtor Audino says he recently leased a large space to packaging company Sonoco as well as two smaller 10,000 square-foot spaces, one to Jasper Engines and other to JB Hunt to warehouse furniture for the new retailer in town, Bob’s Discount Furniture.
Meanwhile, the City of Visalia moved forward with a plan to make it easier to ship and receive goods and move people from Highway 99 and the Betty Drive interchange, agreeing to further widen Riggin, which links to the interchange after crossing over the Union Pacific tracks.
The Visalia City Council recently approved a plan to spend $39 million to widen Riggin to four lanes between Kelsey, where the UPS hub is, all the way past Mooney Boulevard heading east.
A staff report explains that “due to the current economic climate and low interest rates, TCAG has initiated options to bond for select projects within Measure R regional and therefore has solicited the City if it wishes to advance regional projects through bond financing. Currently, TCAG is pursuing advancement of Measure R regional funds that will allow the City to deliver the Caldwell Avenue project from Santa Fe to Lovers Lane by 2020 and a portion of Riggin Avenue by 2022.”