Oakland, AMB start talks for near-port facility
The Oakland City Council voted Tuesday to initiate a one-year exclusive negotiating period with AMB Property Inc. for a long-term lease to develop a large logistics park on the former Oakland Army Base.
AMB’s minority partner is California Capital Group. The team bested Federal Oakland Associates, a joint venture of Washington, D.C.-based Federal Development and local partner Em Johnson Interest, for the negotiating rights. Federal’s redevelopment plan would have turned the industrial property into a retail attraction.
One week ago the Port of Oakland Port Commission gave the go-ahead for a six-month negotiation with AMB to develop an intermodal rail facility on another piece of the former Army base.
The warehouse developer said it intends to outsource design and operation of the intermodal facility to Ports America, which the port also selected earlier this year to take control of its Outer Harbor Terminal for 50 years. The three adjacent facilities will operate as an integrated ship-to-rail container transfer gateway for international cargo headed for Midwest locations. Having near-dock warehouses is expected to help attract cargo from shippers who want to rearrange shipments or make alterations before goods are shipped to their final destination.
AMB, which manages 157 million square feet of distribution space in 14 countries, also reported second quarter net income of $29 million, bouncing back from a $122.3 million loss in the first quarter. Second quarter income in 2008 was $88 million.
The quarterly results included a $3.8 million restructuring charge.
During the three-month period AMB sold 11 properties worth $156 million as part of its de-leveraging strategy and reduced its outstanding debt by $241 million. On Tuesday, the company also announced the sale of a 21-acre parcel at Los Angeles International Airport to Los Angeles World Airports for about $125 million. That deal will be recorded in the company’s third quarter results.
During the second quarter, the company commenced developments on a previously committed project in Europe and a pre-leased build-to-suit in the Americas, totaling 221,000 square feet (20,600 square meters), with a total estimated investment of $31 million.
AMB said it had an average occupancy rate of 91 percent in the second quarter. ' Eric Kulisch