McCarthy Ranch completes its legacy project in Milpitas, Calif., raising the bar in the South Bay Area for all industrial buildings moving forward.
The development of a legacy project often involves some soul-searching, thinking long and hard about the project’s purpose and what will be left behind as time passes. For McCarthy Ranch, that meant a cutting-edge design and an attention to detail that was previously unheard of in the industrial building sector.
McCarthy Ranch’s vision took form in McCarthy Creekside Industrial Center, which sits on a parcel of land the McCarthy family once used for farming in Milpitas, Calif. The multiphase development, which was created for industrial, R&D and manufacturing purposes, has attracted one of the country’s most prominent multinational technology companies. The tenant secured a 10-year lease for more than 353,000 square feet of warehouse space, the entire second phase of the industrial park.
“The design of the buildings is very high-end for a tilt-up industrial product,” Senior Development Manager Joe Goggiano says. “Our tenant roster shows how well these buildings have been designed and built. They feel more like an office project with dock doors rather than a typical industrial project.”
McCarthy Ranch has leased more than 80 percent of the 810,000-square-foot McCarthy Creekside Industrial Center to two of the three largest companies in the world by market value.
Construction began on McCarthy Creekside in late 2016 and consisted of two phases. Phase I included the design and construction of three buildings – two industrial and one retail – totaling approximately 456,000 square feet. Phase II sits adjacent to the north and features three buildings totaling 353,000 square feet. The buildings at McCarthy Creekside vary in square footage, but are all 36-foot-clear and were delivered as cold-shell buildings.
Each of the five industrial buildings in McCarthy Creekside are leased while the 6,000-square-foot retail building with drive-thru remains available. “They are modern distribution manufacturing buildings, which many haven’t been built in the South Bay area,” COO Joey McCarthy Jr. says. “We take great pride in this project and did not cut any corners. We want to build high-quality products and do it the right way the first time.”
McCarthy Ranch partnered with a new contractor, Big-D Construction, for Phase II of McCarthy Creekside. “We have found them to be a great partner to build with and they have been phenomenal as far as what they deliver and in terms of setting expectations,” Goggiano says. “We have had challenges across the board from site specifics to utilities to tenant-driven changes, and having Big-D on the project has helped that process, especially in the early stages of construction. They have been a great partner to deliver Phase II.”
Halfway through Phase II of McCarthy Creekside, a tenant leased all three buildings and required a fairly significant redesign of one of the buildings. The change impacted the docks and one side of the building. Construction slowed because of the redesign, resulting in an extended schedule.
McCarthy Ranch completed the project in about 13 months. “Big-D was great working through the changes and coordinating with our design team,” Goggiano notes. “There was a lot of effort from our contractors to get where we are today.”
Communication was key to ensuring Phase II continued to run smoothly. McCarthy Ranch also attributes the successful completion to Big-D’s nimbleness. “They are able to make a lot of decisions on site and don’t always have to run it up a corporate chain,” Goggiano explains. “It seems like Big-D’s western arm gives their job superintendents and project managers the flexibility to make decisions and move through the process faster.”
About one-quarter of a mile north of McCarthy Creekside in Milpitas, McCarthy Ranch recently completed Sprig Center, a mixed-use development. The property includes a 74,000-square-foot build to suit retail space for Floor & Décor, as well as a Chevron gas station and 840-unit mini-storage complex that is managed by Extra Space Storage.
Construction on Sprig Center began in July 2018 and also sits on a parcel the McCarthy family once used for farming. “I think the uniqueness of Sprig Center was commencing construction all at one time and each space has widely different uses on site,” Goggiano explains. “There was a lot of coordination that had to happen because of the number of parties involved and scope required to completing the project.”
Sprig Center is bound on one side by Coyote Creek and the other by high tension PG&E power lines. McCarthy Ranch worked heavily with the design teams and Toeniskoetter Construction to successfully navigate the physical boundaries and easements it had to abide with. “A large number of groups had to be involved in the final design, as well as the phasing of the actual construction, which is another thing that was handled well by Toeniskoetter,” Goggiano says.
McCarthy Ranch’s biggest takeaways from Sprig Center is recognizing the importance of teamwork and diving into the details thoroughly in preconstruction. “Having in-person meetings, getting every group out to the site and really being able to talk about the details on the built to suit basis was eye-opening for us because of all the factors we touched on,” Goggiano remembers. “From tenants’ needs or last-minute changes, it really took a lot of teamwork to get the project delivered. Our Development Manager, Bobby Caya, along with Toeniskoetter Construction did a fantastic job managing the project for us and worked tirelessly to deliver a first-class retail center.”
Moving forward, McCarthy Ranch plans to acquire more properties with the goal of developing those into industrial and mini-storage facilities, duplicating what it has accomplished at McCarthy Creekside and Sprig Center. The company will continue to focus on becoming one of the Bay Area’s prominent real estate firms with a portfolio of assets nearing two million square feet.
McCarthy Ranch has maintained the same long-term vision for the company and its real estate assets, which has been the key to its success, according to McCarthy. “We want to develop, buy and hold our properties,” he says. “We’re not looking for a short-term deal, so we make investment decisions based on the long-term. We really try to focus on Class A properties, especially those that are well located.”