FedEx Ground moves to larger space in Fairfield

East Bay Business Times - August 25, 2008
http://eastbay.bizjournals.com/eastbay/stories/2008/08/25/story2.html

Friday, August 22, 2008
FedEx Ground moves to larger space in Fairfield

East Bay Business Times - by Jessica Saunders Staff reporter

FedEx Ground Package Systems Inc. signed a 10-year lease for one of Solano County’s largest industrial properties, a Fairfield warehouse built by Panattoni Development Co. that is triple its current space in Benicia.

The small-package shipping service, acquired by FedEx Inc. in 1998, is undergoing a national expansion, anticipating its daily volume will grow from 3.8 million packages to 6.1 million by 2014, said David Westrick, a member of FedEx Ground’s corporate communications team.

FedEx Ground’s new site at 5191 Fermi Drive has 330,750 square feet of high-ceiling warehouse space, eclipsing the 108,000 square feet at its current site in Benicia, where it has been since May 1990, Westrick said. FedEx Ground expects to move into the Fairfield site in spring 2009.

The lease for the new building includes two renewal options, said Matt Bracco, senior director at Cushman & Wakefield of California Inc., who with colleagues Chris Neeb and Glen Dowling represented landlord Panattoni. FedEx Ground was represented by Jeff Kernochan, executive vice president with Fischer & Co.

The rate was not disclosed. Similar high-ceiling distribution space in Solano County was going for 45 cents to 50 cents per square foot, per month triple-net, which means the tenant pays taxes, maintenance and insurance, according to Cushman & Wakefield market research. That would make the initial lease term worth about $17.8 million, without customary annual increases.

FedEx Ground delivers packages of 150 pounds or less by truck using a network of more than 500 distribution hubs and local pickup-and-delivery terminals throughout the United States and Canada. The company’s shipping volume has grown by 10 percent or more nearly every year since it was founded as Roadway Package System in 1985, Westrick said. The shipper was rebranded as FedEx Ground in 2000.

The Fairfield lease, along with a March lease of 326,000 square feet in Newark, are part of a nationwide expansion that includes 200 projects, Westrick said. “It’s all about being able to deliver more packages throughout our network.”

The 18-acre Fairfield facility will serve Solano, Napa and Marin counties, and West and Central Contra Costa County, Westrick said. The Newark facility does not have defined coverage areas yet; for the present it is intended to relieve the South San Francisco facility, he said.

The company plans major tenant improvements, including adding 6,000 square feet of office space and more dock doors, Bracco said.

The building and a 607,208-square-foot warehouse at 5195 Fermi Drive both were occupied by Saint-Gobain Containers, which makes glass containers for wineries and other food and beverage companies, until about 18 months ago. Saint-Gobain moved to a 1.2-million-square-foot building it built at 2600 Stanford Court in Fairfield, and Owens-Brockway Glass Container Inc. moved into the 607,208-square-foot Panattoni building in February 2007.

The warehouses, among the largest in Solano County, are located in the Fairfield Business Park at the interchange of Interstates 80 and 680, Bracco said. In addition, they offer 30-feet ceiling clearances, cross-loaded staging, early-suppression, fast-response fire suppression systems and truck parking. The buildings were constructed in 1997-98.



jsaunders@bizjournals.com | 925-598-1427



All contents of this site © American City Business Journals Inc. All rights reserved.