With a population of 500,000 and employment of 246,000, it is the least densely populated county of the Bay Area with over 1,131,520 total acres. It continues to be a well sought after destination for visitors and residents alike, whether it be a day spent at one of the many spas or wine tasting rooms, mountain biking the varied trails and country roads, or kayaking along the majestic rivers. Due to varied terrain and coastal environment of Sonoma County, much of its recreational opportunities lie within the county’s eleven California state parks, encompassing a total of 36,000 acres. In addition, the county has over thirty regional parks.
The unemployment rate is well below California and the U.S. at 3.2%. The gross metro product is about $25 billion per year rising about 3.2% per year. There are over 26,000 businesses in Sonoma County. Notable companies are Medtronics, Keysight Technologies, Amy’s Kitchen, Kendall Jackson Wineries, and Lagunitas Brewery, which continue to innovate and grow. With a rich winery district, Sonoma County’s grapes are the primary cash crop in the area. Some of Sonoma County’s world-renown wineries include: Kendall-Jackson Wine Estates, Gallo, Don Sebastiani & Sons, Korbel and Rodney Strong Wine Estates.
Major assets of the county include Santa Rosa Junior College with over 36,000 enrolled, Sonoma State University with enrollment of 9,400, and the famous Green Music Center affiliated with the University. Sonoma State also has an engineering and graduate engineering curriculum.
Wine, breweries, specialty agriculture and food are all here, growing industries evolving out of the Agricultural history of Sonoma County. They represent over $2 Billion in sales a year.
The tech industry including manufacturing is a higher proportion of employment than other California counties. The tech companies have a high multiplier effect on the economy as compared to retail or hospitality. They provide the economic base while retail, hospitality, health care, agriculture, and wine make the biggest absolute contribution to county GMP.
Sonoma County is home to over 20 major business parks, covering 3,500 acres and 40 million square feet of buildings. With plenty of available space for growth and competitive pricing below most of the Bay Area, the region remains an attractive location for businesses to relocate. Some of Sonoma County’s largest advantages are its access to major highways, domestic and international airports, skilled workforce, and proximity to San Francisco. Over the years, companies including service businesses, software companies and high-tech manufacturers have strategically headquartered their businesses in the region.
The North Corridor Submarket encompasses the Sonoma County Airport area in unincorporated Northern Santa Rosa and the towns of Windsor, Healdsburg, Geyserville and Cloverdale. The submarket consists of approximately 5,795,000sf or 23.5% of the county’s industrial inventory and 2,368,000sf or 16.4% of the county’s office inventory. Approximately 70% of this inventory is located in the Sonoma County Airport Area.
The Sonoma County Airport Area consists of approximately 550 acres and has been developed over the past 30 years. There are a few remaining sites totaling under 50-60 acres remaining to be developed. Most buildings are concrete tilt-up single story, flex/warehouse and two story office. The area is home to a broad range of companies including technology, medical device, social services, professional services, engineering, construction, wine storage/production and breweries.
The towns of Windsor, Healdsburg, Geyserville and Cloverdale offer a mix of smaller local professional service companies along with supportive retail. Moving North from Windsor, the presence of the wine industry becomes more apparent as the landscape becomes more bucolic with winery tasting rooms and production facilities populate most of the larger properties.
Santa Rosa is the largest city in Sonoma County with a population of approximately 170,000 people or about 35% of the county’s residents. The Santa Rosa industrial market consists of approximately 10,350,000sf or 42% of the county’s industrial inventory and 7,200,000sf of office space, slightly less than 50% of the county’s office inventory. In addition, Santa Rosa has approximately 8,000,000sf of retail inventory, which represents about 47% of the county’s retail space.
Tenants & brokers often categorize properties geographically based on quadrants of the city such as Southeast (including Downtown), Southwest, Northwest and Northeast. The geographic dividing lines are typically College Avenue to 4th Street for North and South and Highway 101 for East and West.
The Southeast submarket excluding Downtown represents approximately 1,167,000sf of office space and approximately 987,000sf of industrial space. Most buildings are smaller, 3,000-10,000sf or less and occupied by a broad range of users mainly being professional service and medical related users. The area encompasses one of three major hospitals in Santa Rosa, Memorial Hospital. The hospital’s location along with this areas central Santa Rosa location attributes the area to having a large medical office populace. In addition, many buildings on the main thoroughfares are former single family residential buildings that have been converted to office uses over time. Nearly all the industrial properties in the area as well as big box retail centers are located South of Downtown on Santa Rosa Avenue and its adjoining streets.
The Downtown area of Santa Rosa represents approximately 1,850,000sf or 27% of Santa Rosa’s total office inventory. The Downtown buildings range from one to five stories. Most of the buildings are a mix of ground floor retail with office space on the upper floors. The downtown is undergoing a transition with the completion of the reunification of Courthouse Square in 2017, which has prompted a number of new projects. In addition, the City of Santa Rosa is encouraging redevelopment and increased density in the Santa Rosa downtown core. The city is hoping relaxed zoning coupled with the beginning of SMART train service will encourage development of public transit oriented projects.
The Southwest quadrant of Santa Rosa is the largest geographical of the areas encompassing N. Dutton Avenue to the East (south of College Avenue) to Stony Point Road to the West and College Avenue North to Todd Road at the southern most boundary of the city. The area totals approximately 6,126,000sf of industrial space and 1,250,000sf of office space.
Northwest Santa Rosa consists of the Santa Rosa Business Park and Cleveland Avenue as its primary office product and also includes a number of industrial/flex projects from Coffey Lane to the Piner Road area to the North.
Santa Rosa Business Park was constructed in the late 1980’s and early 1990’s and contains approximately 285,000sf of one and two story, concrete tilt-up office buildings and approximately 68,000sf of industrial/flex space. Originally designed to be more industrial/flex in nature, the park has been converted over time to be predominantly office space based on the convenience of its central Santa Rosa location.
Directly to the North is the Coffey Lane, Piner Road, Airway Drive and Industrial Drive areas. These areas are predominantly industrial in nature with many being utilized as bulk retail buildings. The area totals approximately 2,955,000sf of industrial space.
Northeast Santa Rosa encompasses two major thoroughfares in College Avenue and Mendocino Avenue as well as the Fountaingrove area. Mendocino Avenue is home to the Santa Rosa Junior College which attracts numerous neighborhood retail and service business in its immediate vicinity. In addition, the area houses Kaiser Permanente Hospital and Sutter Hospital. Furthermore, the County of Sonoma and Keysight Technology campuses are located within this area. Not including these campuses, the Mendocino Avenue and College Avenue areas consist of approximately 801,000sf of office space in one to three story buildings. They are intermixed with neighborhood service retail and residential uses as well.
Northeast Santa Rosa is the most affluent area of Santa Rosa and encompasses one of the highest quality office projects in the market, Fountaingrove Center & Fountaingrove Executive Center. These Class A office projects total approximately 630,000sf in 10 buildings. The main tenants are made up of a mix of financial advisors, attorneys, accountants and other professional service tenants including Morgan Stanley, O’Brien Waters, Wells Fargo, Stifel Nicholas, Medtronic, Zainer Rinehart, Kaiser Permanente and Santa Rosa Community Health Centers. Fountaingrove buildings have typically commanded rents at the highest levels of any found in Santa Rosa.
The cities of Rohnert Park and Cotati have a population of slightly less than 50,000 people or approximately 10% of the population of Sonoma County. As expected, the cities also host 3,132,000sf or 12.7% of the county’s industrial space and 1,466,000sf or 10.2% of the county’s office space.
Rohnert Park is home to Sonoma State University. It is located on the East side of Hwy 101 along the border of Cotati and this side of town encompasses most of its housing, neighborhood retail and office buildings. The office market is primarily located in Rohnert Park along State Farm Drive and Commerce Boulevard as well as adjacent streets. However, the former Agilent Technologies Campus, now known as Sonoma Mountain Village, houses a large portion of the office market and it is located on the Eastern edge of Rohnert Park along Petaluma Hill Road. West of Hwy 101 is predominantly made up of larger big box retail, hotels, entertainment complexes such as Graton Casino and the industrial parks.
The population of Petaluma is slightly less than 60,000 people or 12% of the Sonoma County population. However, given its geographic position of being the southernmost city in Sonoma County and its proximity to Marin County and San Francisco; Petaluma consists of approximately 5,440,000sf or 22% of the county’s industrial space and 3,414,000sf or 24% of the county’s office space. Petaluma offers employers in Marin County proximity to the same work force with a reverse commute and lower costs of occupancy. This typically leads Petaluma to be the first to rebound after a downward trend in commercial real estate. In addition, Petaluma rental rates are typically higher than its Sonoma County neighbors.
Petaluma is typically broken down by tenants and brokers into thirds Southeast Petaluma (between East of Highway 101/South of East Washington), Northeast Petaluma (East of Highway 101/North of East Washington), and West Petaluma (West of Highway 101 including Downtown). Given that a good deal of the employees are commuting to Petaluma from either Marin County or Northern Sonoma County, tenants are often conscientious of the additional travel times between the areas and focus on a location within Petaluma which negates as much of the travel time impact on employees and customers as they can.
Southeast Petaluma includes the Oakmead Business Park, Cader Lane Industrial Park and Lakeville Business Park consisting of approximately 2,261,000sf of industrial space and approximately 630,000sf of office space. The park was developed in the late 1970s and continues to see new development of vacant parcels. The park contains a mix of high tech manufacturers, professional office users and warehousing. Major tenants include Camelbak, Athleta, Laffort USA, Hydrofarm, Freidman’s Home Improvement, Workrite Ergonomics, Scott Laboratories and Labcon.
Northeast Petaluma includes the Redwood Business Park, Southpoint Industrial Park, Petaluma Industrial Park and McDowell Business Park consisting of approximately 1,875,000sf of industrial space and 1,678,000sf of office space. Northeast Petaluma is often preferred by those commuting from the North and has the advantage of a number of retail amenities serving those employees. Major tenants include Lagunitas Brewing, Enphase Energy, Intelisys, CrossCheck, Digilock, SMART and Ciena.
Western Petaluma including Downtown consists of approximately 1,002,000sf of industrial space and 1,075,000sf of office space. The industrial properties are primarily located off of Lakeville Street, Payran and North Petaluma Blvd. The Downtown Theater District was redeveloped in the early 2000’s and offers a plethora of restaurants, brewpubs and other retail amenities. With the exception of a few multi-story buildings constructed during the redevelopment of downtown, most of the office product is contained in smaller properties of 2,000-10,000sf.