No tenant yet for Victory Station

Several months after its completion, a 250,000-square-foot light industrial building in Schellville looms large but is sitting empty.

But brokers say they are getting close to a deal to lease the 22810 Eighth St. E. commercial complex that’s been dubbed “Victory Station.”

The owner is developer Joseph “Jose” McNeill III, of Fairfield-based McNeill Real Estate Services.

McNeill told the Index-Tribune he came by the property by chance about five years ago. He says he was driving by the property in 2014 and he saw a sign that said, “Coming in 2004.” He laughed, and undeterred, he pulled over to take a look.

Local developer Rick Deringer had purchased the land from previous owner Ed Ferro and had been contemplating a project on the site for more than a decade.

McNeill closed on the 19-acre property in 2016 for $4 million. He broke ground in late 2017 and the project was completed in 12 months. McNeill says he has 35 years experience in commercial real estate, including development of the 268,000-square-foot Cader Corporate Center in Petaluma and the 375,000-square-foot Greenwood Commerce Center in Napa, both of which were fully pre-leased prior to their openings.

According to Maggie Fleming of Permit Sonoma, the Victory Station project is the largest warehouse building to be constructed in Sonoma County in the past five years, and one of the last large industrial sites left in the county.

“There are no similar spaces to this,” said McNeill. He says that Victory Station is the largest single tenant option currently available.

“Finding land to do commercial development in this area is tough,” he added.

The Victory Station project was completed in November. It differs from most of the other large light industrial spaces in the Valley because instead of metal walls, it features concrete tilt-up walls on a 6-inch slab. This kind of space can be insulated and temperature controlled.

A team of five brokers with Cushman and Wakefield have been showing the space to potential tenants since construction began. McNeill said he had two companies who were very interested early on.

One was a wholesale hydroponics company, but cannabis regulations led to lower sales in California and they backed out.

“And then the fires broke out the week we were breaking ground,” he said.

Today, the building sits empty, in “shell condition,” awaiting a tenant who can choose how they build out the space. The property is zoned M3, for light manufacturing, research and development, warehousing and distribution or retail/office use. McNeill describes it as an ideal facility for a wine-related business, distributor or for case-goods storage.

The space is available for a single tenant or up to five smaller tenants at $10.20 a square foot a year. At almost 250,000 square feet, a single tenant would be looking at a rent north of $2.5 million a year.

“We would like to have one tenant, but the building is divisible to 50,000 square feet,” said McNeill.

Agent Brian Foster of Cushman & Wakefield says he is currently talking to three full-use tenants and several partial use tenants who might be interested in the space. At least one, he said, is a distribution company that wants to serve the Sonoma area.

The building is located near the intersection of Highways 121 and 12 and around eight miles from both Highways 37 and 29. The property is adjacent to Northwest Pacific tracks across from the old Schellville Station. The rail line runs along the back side of the property down through Napa and connects to the main United Pacific line.

“Our spot midway between Petaluma and Napa is also unbeatable,” said McNeill.

So, why is the space still sitting vacant?

McNeill sites the lack of reasonably priced housing in the area.

“No businesses want to move up here now because there is no place for their employees to live,” he said.

Deringer said he thinks McNeill would have had better luck developing a series of buildings, not just one.

“One big building is challenging,” he said. “In this business, it is tough to have everything in one bag.”

Email Lorna at lorna.sheridan@sonomanews.com.