Ace plans to sign a deal for a 627,000-sf building at 3301 Industrial Ave., which was formerly occupied by AT&T. Ace ultimately plans to add about 400,000 sf to meet its need for a larger warehouse.

The initial contract calls for a lease with a purchase option. Terms were not disclosed by either company and will not be released by the county until the deal goes through. Dave Leatherby of Colliers International brokered the deal.

According to Ace representatives, the company needs the extra space to meet increasing demands from the 330 stores in California and Nevada. When the hardware chain first looked at the space three years ago, it was not willing to pay the asking price. After finding a less appealing location in Tracy, the company was contacted by Reynan & Bardis, a Sacramento firm that had acquired the AT&T building. Reynan & Bardis presented the hardware company with a more appealing offer than the first one.