IKEA to Vacate Napa Valley Distribution Center
Home furnishing giant consolidating West Coast logistics, upping in-store delivery.
IKEA is planning to close its 646K SF distribution center in Napa Valley as it consolidates its West Coast logistics operations and increases in-store deliveries.
The Swedish home furnishings giant announced this week that layoffs will begin in June at the warehouse it has occupied since the building was delivered in 2018 at 1 Middleton Way in American Canyon, which is in proximity to Highway 29, 1-80 and I-680 north of San Francisco.
The company confirmed that it will close the site when its lease expires in February, the San Francisco Business Times reported. JLL is marketing the Class A fulfillment center and its 41-acre site.
At the end of 2022, IKEA signed a lease for a newly built 630K SF distribution center at the Tejon Ranch Commerce Center in Bakersfield, in a deal brokered by JLL.
In a statement, the company said it would be moving distribution from the Napa Valley warehouse to its other West Coast fulfillment centers while it continues to shift more capacity for pickup and delivery orders to IKEA stores.
“Delivering directly to customers from their local stores saves time, labor and delivery-mile emissions while keeping the [warehouses] available for longer distance deliveries,” the company said. “These actions are important steps to ensure that we’re prepared for long-term growth and are able to meet our customers’ needs for convenience and speed.” RREEF Property Trust acquired the warehouse at 1 Middleton Way for $90.5M in 2018 from San Francisco-based DivcoWest.
JLL is marketing the Napa Valley facility as a “large-scale temperature control conversion opportunity” that can be divided into multiple suites for food and beverage tenants.
“The property represents a rare opportunity to acquire a distribution facility in one of the top performing industrial markets in the country with a vacancy rate of 1.6%,” JLL’s marketing materials said.
“In Napa County, the scarcity of developable land, strong industrial demand, and barriers to entry have led to a decrease in vacancy rates, resulting in a 37% rental growth over the past five years, with this trend expected to continue,” the marketing brochure said.
IKEA has four stores in Northern California, in San Francisco, East Palo Alto, Emeryville and Sacramento; the company has five stores, two planning studios and two pick-up locations in Southern California.