September 30, 2020
By Paul Bubny
Consumer packaged goods companies typically turn to industrial real estate developers to build manufacturing and distribution facilities, or develop the properties in-house for their own use; it’s not often that a CPG firm branches out into development for third-party users. Yet, that in a nutshell is how the Wonderful Company, through its Wonderful Real Estate platform, became a landlord to industrial tenants such as Formica, American Tire and Williams Scotsman in California’s Central Valley.
Connect Media spoke with Wonderful Real Estate’s director of business development, Erin Poulson Morris, for a behind-the-scenes look at how the company made the leap from in-house expertise to third-party projects. Poulson Morris will be among the experts we’ve assembled for our Connect Industrial Leaders webinar, available on Oct. 6.
Q: The Wonderful Company has had extensive experience developing facilities for its affiliated brands. What made it a logical next step to offer that expertise to third-party clients at Wonderful Industrial Park?
A: The Wonderful Company has years of experience building, owning and operating successful beverage, nut, produce, floral, and wine facilities located globally. We’ve spent billions perfecting our facilities and streamlining our supply chains. This firsthand knowledge as an operator makes us unique to other developers as we have a deep understanding of how to process, store, and transport goods reliably and efficiently. The Wonderful Company has owned and operated business in the Central Valley for more than 30 years and is one of the largest employers in the valley. Our intimate knowledge of the labor market and business climate in the Central Valley combined with our expertise as an operator, made the move to developer a natural transition.
With 1,600 acres of fully entitled land, we designed the park from the perspective of an operator and created land sites that can accommodate a variety of users, offering the flexibility to maximize clear heights and coverage and offer efficient solutions for storage, trailer and employee parking. Further streamlining our development and execution process, we finance our projects utilizing our balance sheet and have a very quick investment decision process as we are not beholden to stockholders or an investment committee. We also utilize in house legal, finance, and property management resources so we are truly able to offer full-service real estate development services. Having access to all of these resources has allowed us to be quite successful as a third-party developer.
Q: Is Wonderful uniquely qualified to make the transition from in-house capital projects to developing business parks, or does this represent a model that others could emulate–perhaps in other parts of the U.S.?
A: We believe that we truly are unique in the way that we were able to develop Wonderful Industrial Park. As I mentioned before, The Wonderful Company had years of experience not only operating our own facilities, but also interacting with the local Central Valley communities and this rapport is a huge part of our success as a developer. Our company founders, Lynda and Stewart Resnick, are true visionaries and as their businesses in the Central Valley expanded, so did their commitment to improving those local communities. They have not only improved the infrastructure in these communities, but have also founded schools, donated millions of dollars in scholarships, and created programs to prepare the next generation of leaders in the Valley.
As one of the largest employers in the Central Valley, Wonderful has an unmatched understanding of and relationship with the local labor force. This has provided a strong advantage to our tenants who continuously report of the success they have hiring and maintaining a steady and reliable workforce in our park. The ability to build on the success of the strong supply chain that The Wonderful Company has built in the Central Valley is the backbone of our success and not something that we believe would be easy for other developers to duplicate in California or other parts of the country.
Q: WIP is several miles north of two of the country’s biggest industrial markets: Los Angeles-Long Beach and the Inland Empire. Yet you’ve assembled a blue-chip tenant roster. What’s the value proposition for WIP and the Bakersfield area?
A: Yes, we are quite proud of the occupants that call Wonderful Industrial Park home. Our tenant roster includes Walmart, Target, Ross, Hillman, American Tire Distributors, FedEx, and Essendant (part of Staples). Long-term tenants such as Target and Ross have had steady success at the park over the last decade. In fact, Ross expanded their footprint at the park in 2019 when they leased a one-million-square-foot spec warehouse we developed. They now operate over three million square feet in Wonderful Industrial Park and employ over 1,500. Additionally, Walmart acquired 65 acres in 2018 and recently completed the development of a 630,000-square-foot, highly automated distribution facility optimized for handling, packaging and shipping fresh and frozen food across the Western U.S.
As a tenant of Wonderful Industrial Park, you benefit from the longstanding commitment The Wonderful Company has made with the local community to create a one of a kind logistics park and skilled labor pool to meet the needs of a variety of warehouse, manufacturing, and distribution companies. The combination of flexible land and loyal labor cannot be found in any other West Coast location.
Additionally, the Bakersfield location offers convenient access to the Ports of Los Angeles/Long Beach, Oakland, and Hueneme and puts our tenants within a two-day truck turn to the Western U.S. population of over 70 million. Given the surging home prices seen throughout the state, the affordability that the Shafter/Bakersfield area offers to employees cannot be beat with median home prices under $300,000. vs the Southern California median price of $600,000. The Shafter/Bakersfield location offers a cost of living that is highly competitive and attractive to warehouse workers and highly-skilled labor alike.
Q: You have two additional projects in development in the Bakersfield area. Could we see Wonderful Real Estate bring this model to other markets in the future?
A: Our success is truly linked to the community bridges that The Wonderful Company has built throughout the Central Valley. We are truly a part of our local communities and committed to the success of these communities. In fact, in 2021, the Wonderful Company will introduce a first-of-its-kind amenity center to the park. The amenity center will be home to the Wonderful Company’s Central Valley Corporate Headquarters as well as provide several resources to benefit our tenants and their employees including a conference center, a manufacturing tech vocational training school, health and wellness center, and additional retail services. We are very excited about the vocational school and are working with our Wonderful Education team and a local community college to create a curriculum that will provide our tenants with a place to recruit skilled workers as well as provide additional training to current employees. This project is a further testament to the commitment Wonderful has with its local community and why we will continue to call the Central Valley home.
For comments, questions or concerns, please contact Paul Bubny