The Fresno industrial real estate market is seeing some construction action.
A 96,000-square-foot warehouse is under construction at the 230-acre North Pointe Business Park in southwest Fresno.
And underground work is also starting on the last 30-acres of a small building subdivision on the west side of Fresno.
That’s good news for a commercial sector that hasn’t seen any speculative development in the last five years, said Ethan Smith, a broker and vice president industrial division at Grubb & Ellis Pearson Commercial, a Fresno commercial real estate firm.
Speculative building is the construction of a building without a specific use or buyer and tenant identified.
During the building boom – between 2005 and 2007 – the industrial market added several million square feet of inventory into the market, according to a fourth quarter 2012 industrial report from Grubb & Ellis.
But development came to a standstill during the recession. Rental rates also took a hit falling by up to 25% while sale prices for non-bank-owned properties fell by up to 30%.
“These are not great statistics, but they are far from the disaster predicted by many,” the report said.
Rental rates are now starting to level off and sales prices are holding steady. And Class A warehouse space is emerging as a strong spot. Class A caters to large businesses that need more than 50,000 square feet of space.
The new North Pointe warehouse, which should be ready for occupancy by mid-summer, is a Class A space. An out-of-state business whom Smith declined to identify has signed a lease and will occupy about half of the building. Smith is trying to fill the other half.
The west Fresno project is an expansion of an existing development between Valentine and Brawley avenues, south of Shaw avenue. The developer tore down an existing plant and is getting the land ready for development, Smith said.