Wine driving Solano commercial real estate

Sep 21, 2015

(NBBJ) - Many know Solano County for its ample acreage under roof as a logistics hub for the San Francisco Bay Area, but increasingly more of that space is dedicated to moving through the necessities of making wine in the North Coast and points beyond, according to new real estate market research.

Solano has about 6 million square feet of industrial space dedicated to storage and distribution of wine bottles, fermentation and aging vessels, bottle closures and cases of finished wine, according to Brooks Pedder, executive managing director of Cushman & Wakefield in Walnut Creek. That’s about one-third of the space in the county’s major markets.

“You don’t really think about Solano as being a major wine hub,” Pedder said.

He presented his findings, drawn from building-by-building analysis of tenants, at the Impact Solano conference, presented by Solano Economic Development Corp. and the Business Journal in Fairfield on Sept. 17.

Almost all the square footage for wine-related businesses is located in Benicia and Fairfield, Pedder said.

“Because of the proximity to Napa and Sonoma, Fairfield and Benicia do pretty well,” he said.

About 58 percent of Solano’s wine-related square footage is for bottle distributors. The rest is for the other winemaking supplies and services.

Demand for Solano industrial space is set to increase even more, Pedder said.

“Napa has space issues, and you are going to see more and more spillover into Solano,” he said, noting almost 1 million square feet of demand for space in Napa Valley but projects under construction are preleased or soon to be so.

Also helping to accelerate the shift east to Solano are recently expanded access between the counties via Highway 12, lower rents and recent investments in Solano’s Suisun Valley appellation by E&J Gallo Winery and the Wagner Family of Wines, maker of the Napa Valley-based Caymus luxury brand, Pedder said. Solano rents can be 15 percent to 20 percent lower than for comparable space in Napa County, yet Solano’s industrial space vacancy is very low, below 4 percent.


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