Large Amcor Sunclipse lease healthy sign for industry

0 Comments | Oakland Tribune, Jul 24, 2008 | by George Avalos

NEWARK -- The industrial market in the East Bay continues to show signs of strength, with the latest indicator of robust times materializing as a big lease here by packaging supplier and manufacturer Amcor Sunclipse.

Amcor Sunclipse has rented 194,000 square feet of distribution and warehouse space at the LBA Logistics Center in Newark.

"It's definitely a growth move," said Eric Bloom, chief executive officer with Amcor Sunclipse. "We are expanding."

Buena Park-based Sunclipse expects to have about 75 employees at the site when the company begins operations there. Some of the employees at the Newark facility are expected to relocate from existing Amcor operations in the Bay Area and others could be new hires.

The 12-year lease is one of the larger industrial deals this year in the East Bay. The transaction was arranged through Colliers International broker Greig Lagomarsino and CB Richard Ellis brokers Rob Shannon and Joe Kelly.

The industrial complex, owned by LBA Realty, has enjoyed a successful year. In March, FedEx Ground signed a lease for 326,000 square feet. FedEx expects to employ hundreds at the distribution center.

"Very few new warehouse buildings have been constructed" in recent years in the Bay Area, Kelly said.

Land is so expensive that it's hard for a developer to get a traditional return on rents from a brand-new warehouse or distribution building, Kelly added.

The result is a lack of supply in the East Bay, especially in areas near the region's airports and ports.

"There's a finite amount of inventory for Class A distribution buildings over 100,000 square feet on the 880 corridor," Lagomarsino said.

Amcor Sunclipse intends to use the facility primarily as a distribution center, although a small amount of manufacturing could occur at the site, Bloom said. Amcor makes corrugated products, packing material, janitorial products, shipping supplies and custom- built corrugated packaging and industrial packaging products.

The company operates more than 35 distribution centers in the United States, Mexico and Europe. It also has facilities in Hayward and San Jose.

"We would certainly like to grow beyond our initial employees," Bloom said.

George Avalos covers jobs, economic development, commercial real estate, finance and oil companies. Reach him at 925-977-8477 or gavalos@bayareanewsgroup.com