Birdwell, who has been with Sares-Regis for more than 20 years and in Northern California for the past 10 years, tells GlobeSt.com it has been hard to find good opportunities in Northern California for ground-up industrial development of any size.

"I did a couple of million sf of industrial in my early days with Sares-Regis in Southern California but as I moved north many of the opportunities were for higher-end R&D campuses," he says. "I've been looking forward to a pure industrial opportunity in the Bay Area and this is the first on in the past decade that was compelling. To be able to acquire an existing development and to be able to develop 580,000 sf of additional space…."

The drivers for the Pinole Point site are its proximity to the Port of Oakland and the region's major transportation corridors. Industrial vacancy in the region is generally in the single digits and, according to Birdwell, there is simply no measurable competition for modern product that would be on a bit larger scale, with buildings north of 100,000 sf. "Richmond is really the first stop [from the Port] where you can offer new larger-scale buildings," he says.

Birdwell is not disclosing the equity partner or its percentage interest in the LLC developing the site. The site is fully entitled for the expansion and the construction loan is in place. The acquisition and construction lender, Bank of America, is OK with moving forward on the project without any signed tenants, Birdwell says.

Whether the expansion goes up all at once or in phases is still under consideration. Birdwell says if not the entire thing then at least the majority of it will go up in the initial phase. "There have been requirements in the market lately," Bidwell says. "We were approached while in due diligence by people interested in the existing property and for spaces larger than our current vacancies."

The current market rate for basic warehouse and distribution product in the region is in the mid $0.40s on a triple-net basis and likely will be higher when the Pinole Point additions come to market. Birdwell says the goal is for a mid-teens, leveraged IRR on a project-level.

"We're open to either lease or build-to-suit," he says. "We'll launch a very substantive speculative phases and begin dialogue immediately with the tenant community."

One of the company's other ongoing projects in Northern California is Tower Plaza, a 12-story 200,000-sf class C office building in San Mateo that the company acquired last summer and is now repositioning as a class B asset by way of a $10 million improvement program.