The Foster City, CA-based, publicly traded company has opted to remain in its present 100,000-sf Renton site. The cut back in Seattle-area expansion plans was simultaneously coupled with the lay off of approximately 134 employees, a 39 percent reduction of its Renton work force.
The East Valley Warehouse facility at 22033 84th Ave. in Kent was leased about two years ago when many market gurus were predicting wild success for the company. Wevban's IPO, set for October 1999, was pushed back several weeks because investor buzz was so hot the SEC imposed a "quiet period" to cool off rampant speculation.
That same year, Webvan inked a $1 billion, three-year deal with national construction giant Bechtel Group Inc. to build 26 distribution centers across the US. Then the company hit rough waters that capsized many of its plans.
As previously reported by GlobeSt.com in February, Webvan opted out of a 175,000 sf build-to-suit distribution center in Denver, terminating its move into that market. Two months later, the company closed its Atlanta operations, vacating 350,000 sf and laying off 485 employees. Webvan's remaining markets are Chicago, Los Angeles, Orange County (CA), Portland (OR), San Diego, the San Francisco Bay Area, and Seattle.
In the lease to Webvan, Scott Price of Trammell Crow represented the Kent building's owner, the San Diego-based industrial REIT AMB Properties. Price tells GlobeSt.com the single-building property contains 654,310 sf of 30-ft clear-height high-bay space "clearly set up for use as a distribution center." Lowe's, the national home-improvement chain, occupies the balance of the space, or approximately 300,000 sf.
Price says of the Kent/Auburn industrial submarket, "We've had a lot of space come on line the past three months," adding, "The prognosis still good, but we've definitely felt a slow down." According to Price's estimates, the current vacancy rate in the area's industrial properties is about 6.5 percent. While the numbers involved in Webvan's lease were not available, listings at OfficeSpace.com post asking rates for warehouse space at comparable properties in the mid- to upper-$0.30's.
A Webvan spokesperson tells GlobeSt.com that while the company is looking to sub-lease the Kent facility, "it's not been priced yet. We are still identifying a broker to handle the deal."
Once a broker is selected, Webvan's next step will be determining the value of the equipment to be leased with the facility, the value of the space itself and market demand before settling on a price. Equipment and amenities to be sub-let with the space includes approximately 100,000 sf of refrigeration-freezer space, 4.5 miles of conveyor equipment and six carousel pods, as well as 24,000 sf of office space.
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