3310 Industrial Drive — Distressed Redevelopment
A former cannabis facility, partially demolished and generating no cash flow for years, with out-of-state owners who could no longer manage it — sold into a softening industrial market. Rather than a traditional sale, we targeted experienced developers and value-add investors and procured an offer from a developer already working with a national build-to-suit tenant.
The Challenge
The previous tenant at 3310 Industrial Drive, a cannabis operator, had demolished a large portion of the building's interior improvements for a planned conversion — then ceased operations and vacated. The building was left partially demolished, no longer functional for most industrial users, and in need of substantial capital to return to service.
The owners had relocated out of state and could not actively manage the property, oversee construction or run a redevelopment. The building had produced no cash flow for several years, and the Sonoma County industrial market was beginning to soften. Marketing to traditional owner-users would have required extensive rehabilitation first.
The strategic question: how do you maximize value on a distressed industrial asset in a cooling market while protecting the sellers' timeline and tax strategy?
The Action
Rather than position the property as a conventional industrial sale, we marketed it as a redevelopment opportunity to experienced commercial developers and value-add investors — emphasizing the corridor's location fundamentals and long-term tenant demand in the North Bay logistics and service-industrial market.
Targeted outreach to qualified development groups produced an offer from a highly experienced developer already working with a national tenant that needed a build-to-suit industrial facility.
The transaction had to balance the buyer's entitlement timeline against the sellers' need for certainty:
- Multiple phases of non-refundable deposits
- A structured entitlement and permitting timeline
- Coordination with the buyer's tenant lease negotiations
- Budgeting for significant capital improvements and redevelopment costs
The buyer needed time to navigate the City of Santa Rosa permitting and entitlement process. In exchange for that flexibility, the sellers secured pricing that exceeded prevailing market expectations at a time when industrial transaction velocity was slowing.
The Result
The property went into contract with a well-capitalized buyer who had both the capital and the tenant demand to reposition it.
Key outcomes:
- A well-capitalized developer with a national tenant commitment
- Multiple layers of non-refundable deposit protection for the sellers
- An above-market sale price despite a cooling industrial market
- Sufficient time for the buyer to secure City approvals and finalize tenant lease terms
The structured timeline also gave the sellers the room to complete a 1031 exchange, with ample time to identify and acquire a replacement investment property. A distressed, non-operational building became a redevelopment with long-term tenant occupancy — at maximum value and with the tax advantages intact.
Other case studies
3286 Airway Drive — Industrial Conversion & National Tenant Lease
A warehouse shell marketed as retail sat unsold for months in one of Sonoma County's most active industrial corridors. The property was zoned Light Industrial and surrounded by logistics and service users, but it was priced and marketed to a retail tenant pool that barely existed there. We underwrote it as an industrial investment instead, acquired it below market for an investor client, and repositioned it — ultimately securing a 10-year NNN lease with Tesla.
Read the full case study →3300 Industrial Drive — Tesla Build-to-Suit
A vacant industrial parcel that had sat idle for over twenty years — entitlement costs made traditional development infeasible. We identified that neighboring 3286 Airway Drive (leased to Tesla) needed additional parking to satisfy City sales-permit requirements, and structured a tenant-funded build-to-suit that turned a no-income lot into a stabilized asset.
Read the full case study →400 Tesconi Circle — Industrial Lease-Up & Long-Term NNN Tenant
An owner who had outgrown a small industrial building with a large yard wanted to keep it as an investment rather than sell — which meant landing a quality tenant on a long lease in a slowing market, while still moving out. We marketed early, found the one tenant whose unusual requirement matched the site, and structured a 10-year NNN lease that started above market.
Read the full case study →