Prologis Plans Mega-Warehouse on 29-Acre Oakland Site
Logistics giant projects rents to grow annually by 4% to 6% over next three years.
Prologis is moving forward with plans to build a huge warehouse on a 29-acre site in Oakland that was acquired by Duke Realty prior to its merger with Prologis in 2022.
The San Francisco-based logistics giant will be seeking approval from the city planning commission this month to put up a 430K SF warehouse on the former site of the Owens-Brockway glass recycling facility, a site that Duke purchased in 2021 for $34.3M.
The project at 3600 Alameda Avenue will be built on a spec basis, with plans calling for the demolition of 16 existing buildings encompassing almost 1.2M SF, according to a report in the San Francisco Business Times.
The $23B acquisition of Duke Realty by Prologis included 7M SF of projects under development and an estimated 17M SF of developable land. Based on its latest earnings call, Prologis is bullish on the outlook for the industrial market in the next three years.
“We see some challenges in some submarkets as near-term outsized deliveries are met with still recovering demand but our thesis remains the same as we’ve been describing for over a year,” said Tim Arndt, the Prologis CFO, during the January call.
“The supply cliff will converge with normalized demand later this year, delivering an environment conducive to strong market rent growth,” Arndt said. “We believe that annual market rent growth will average between 4% and 6% over the next three years, with 2024 being modestly positive and ramping afterward.”
Prologis started more than $2B in new developments in Q4 2023 across 46 projects in 27 markets, with nearly half of the activity involving build-to-suit projects, Arndt said.
According to the planning documents for the Alameda Avenue project, the new industrial facility will include 30K SF of office space, 48 loading dock doors and 228 trailer parking stalls. In addition to warehousing, the facility could accommodate uses including manufacturing or research and development.
The plans call for an extension of 37th Avenue to connect to Alameda Avenue, which will be realigned to create open space adjacent to the estuary shoreline. A portion of the southeast corner of the site will be left open for future development, which could include retail or a restaurant.
Oakland’s industrial market ended Q4 2023 with a 3.8% vacancy rate and net absorption of negative 111K SF, according to a CBRE market report.