Developer YS Buildings LLC is putting up two 300,000-square foot buildings for solar company Sunrun, other tenants in Visalia Industrial Park
VISALIA – Los Angeles developer YS Buildings, LLC completed its first “spec” logistics warehouses earlier this year. It comprises two 300,000-square foot behemoths across from Amazon on the south side of Riggin in the Visalia Industrial Park.
Agent for the company, Freddie Molina says the development firm is ready for more despite a one-third cost increase in this year’s construction prices.
Demand is enough that “we’re going for it anyway” he said. Costs for lumber lead the pack but other key components from steel to concrete and all oil products have jumped sharply in price since the pandemic cooled. Lumber prices that were $400 per thousand board-feet are now three times that at over $1,300. Home builders say that the lumber shortage had caused the average single-family home price to rise by $35,872.
With the help of Visalia real estate broker Matt Graham, YS Buildings LLC, has leased one of the two 300,000-square foot warehouses to solar company Sunrun in the past few days and the San Francisco-based company is moving in. Molina says Sunrun will distribute solar panels and battery storage units used on homes across California. As for the number of jobs- no number has been confirmed and at least for now – Sunrun is not returning phone calls.
Sunrun recently said it has more than 550,000 customers, and an 18% year over year improvement including Vivint Solar. Besides installation of these energy units, Sunrun is the largest provider of third party system finance for solar in the U.S. Besides rooftop panels the company now sells its rechargeable solar battery system, Brightbox as of last year.
Sunrun argues home owners will be better off with solar. “In December, PG&E, the largest utility in California, announced that customers will be hit with an average rate increase of 8%. Just this month many homeowners in Texas have been surprised with skyrocketing bills, many over $10,000. Utility rates have been increasing across the country, with retail rates in our markets increasing 3% per year on average for the last 15 years.”
In their most recent financial report, Sunrun raised its installed growth rate estimate to 25-30% for the year, and said that “the strong momentum that we saw in the fourth quarter has continued into 2021.”
State electricity generation that will all come from clean energy sources by 2045. Sunrun maintained its position as the largest residential solar installer in the U.S. in the last quarter of 2019.
Right now, half of the other 300,000-square foot building is spoken for to be leased by Redwood Logistics to house pet food from Visalia company Perfection Pet Foods, who have been in an expansion mode themselves.
Molina says he is working with several other firms who may want the last 150,000 square feet.
Meanwhile, Molina says he has acquired another 18 acres just east of his buildings and will ask local builder BJ Perch to construct another 350,000 square feet “as soon as possible.” Molina will not only pay more for both land and construction this year but is obligated to build part of Clancy Street to connect to nearby streets.
Molina is not stopping there but looks to acquire more land just to the east and continue the construction spree.
Rapid expansion in the Visalia Industrial Park is not a new trend as several other developers are doing the same with a 1.2 million square feet project being developed by a Phoenix company, is now approved by the city to move forward at Plaza and Ferguson. The developer says the huge project will employ 400.
This has all been set in motion by UPS and Amazon’s construction of two logistics operations at Plaza and Riggin in the past year. UPS is operational and Amazon is likely to open their doors in a matter of weeks.
Both Fresno and Visalia brag they are strategically located midstate to reach the Western U.S. market in two-three days by ground transportation and one day to reach both the Bay Area and Southland. But Visalia had the availability of a large distribution building ready to lease unlike Fresno, where supply is said to be limited.