Transpacific Development Adds 750,000 SF for $29M

TRACY, CA-Transpacific Development Co. acquired a new 750,000-sf, single-tenant distribution facility here for about $29 million as part of a plan to expand its distribution facility holdings. Located at 1550 North Chrisman Rd., the building is fully leased on a long-term basis by cereal maker Kellogg Co.The building includes 100 dock-high doors, cross-docks, 32-foot clear height and 6,500 sf of office space. Kellogg occupied the facility in May upon its completion by developer and seller Robert Patillo Development Partners, an affiliate of Atlanta-based Robert Patillo Properties. TDC president Thomas Irish declined to confirm or deny the tenant or the sale price, which were provided by third-party real estate sources, but did tell GlobeSt.com that his company is “in full acquisition mode” and “likes that stretch between Tracy and Sacramento.”Indeed, the Kellogg property is the company’s third acquisition in the Central Valley. Its other holdings in the area, acquired over the past 30 months, include a 431,000-sf distribution facility in Lathrop that is fully leased to DaimlerChrysler and a 630,000-sf facility fully leased to C&S Wholesale Grocers. The Tracy acquisition takes the company’s Central Valley distribution holdings to 1.8 million sf, or 15% of its real estate portfolio, which is currently 85% office.Irish says TDC has focused on larger distribution facilities due to its desire to make investments of no less than $20 million. As to why it has not been adding properties in Southern California, where the company is based, Irish says the capitalization rates are better further north. “Southern California pricing is really extraordinary right now,” he tells GlobeSt.com. “We find the pricing in Northern California to be more attractive.”Despite being in full acquisition mode, Irish says it has been hard to source good deals in such a competitive investment market. He adds TDC is pursuing large, single-tenant office and distribution buildings because it believes they provide both attractive returns and long-term value, which is key for a company that has not sold anything in six years. TDC uses all its own cash for its investments, says Irish. The company’s investment rage is $20 million to $200 million. The Kellogg building transaction was brokered by Kevin Dal Porto, Dave Haggerty, Blake Rasmussen and Ryan McShane of the CB Richard Ellis Industrial Properties Consulting Team (IPCTeam) in Stockton, and Glen Allen of Costa Mesa-based Newport Real Estate Services, Inc.