McCarthy Ranch – McCarthy Creekside Industrial Center

McCarthy Ranch picMcCarthy Ranch aims to deliver a high-quality product with the McCarthy Creekside Industrial Center.
By Bianca Herron

McCarthy Ranch is a sixth-generation family business that got its start as a farm and ranch in the 1800s. COO Joseph McCarthy Jr. recalls that as a young child his father, Joseph McCarthy Sr., oversaw the farm and its crops, including pear trees and a dairy farm.

In the 1980s, McCarthy Sr. transitioned from a farmer to a real estate developer as the industry began to take off in the Los Gatos, Calif.-based company’s area. Over the course of the next 30 years, he would look into joint ventures and sell parts of the property to other developers and companies.

“We were still operating as a farm as late as 2011,” McCarthy Jr. says. “We started off with almost 1,000 acres; however, the amount of property we were farming was getting smaller. We weren’t the only company in the Silicon Valley going through that same transition as well.

“At that time, all of the support we needed to operate a farm was moving out of the area to Central Valley,” he explains. “It became harder to actually farm the property. We unfortunately had to let go of some loyal employees and connections when we terminated our farming operation.”

McCarthy started working for the family business in 2002, focusing on the real estate as he had no background in farming.  “We started acquiring more land and buildings, and started focusing more on development,” he says. “Most importantly, we started leveraging the knowledge my dad had gained over the years in real estate.”

Keys To Success

Today, McCarthy Ranch not only develops its own land, but is focused on developing and creating properties to hold in its family portfolio as legacy assets. McCarthy Ranch box

The company has a long-term vision for its company and real estate assets, which has been a key to McCarthy Ranch’s 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.”

McCarthy Ranch’s small but mighty team of six employees has played a critical role in its operations, and allows it to be nimble and pivot when necessary. “We’re lean and mean,” McCarthy says. “Although there is not many of us in the office, our real team includes our consultants and contractors. Those guys are very important in our organization as well.

“The nice thing is that we can scale up and scale down with the consultants and contractors when we need them for certain projects,” he continues. “They really are an extension of the company. It’s a team effort.”

On Schedule

McCarthy Ranch’s latest project is the McCarthy Creekside Industrial Center. The industrial center will replace a parcel McCarthy Ranch once used for farming in Milpitas, Calif., and will feature three buildings – two industrial and one retail – totaling approximately 456,000 square feet. 

McCarthy Ranch started construction in late 2016, but was stalled until spring 2017 due to a heavy rain season. “After about a week-and-a-half of working, the first rain storm came and it didn’t stop raining the entire winter,” McCarthy recalls. “We resumed construction in nearly early May in 2017. It was unfortunate, but we’re on track now because we’ve had great weather and everything has gone as planned.”

All three buildings are currently under construction. “Building A is a 36-foot-clear, 314,000-square-feet cold-shell building,” McCarthy explains. “It’s a real modern distribution manufacturing building, which many haven’t been built in the South Bay area.”

Building B has the same building standards as Building A, but is 136,000 square feet. McCarthy Ranch recently finished its roof. “We’re about 90 percent done with Building A’s roof,” McCarthy says. “After we complete that, we’ll have some site work to do, including landscaping and cleanup work. Hopefully, between now and then we’ll have some tenants sign leases and we’ll start their tenant improvements in the coming months.”

The retail building is 6,000 square feet, and unlike the industrial buildings, McCarthy Ranch plans to have it completed before April. “It’s a smaller, less complicated building,” McCarthy says. “It will also be a cold shell building. We’re in talks with retail tenants, including delis, restaurants and financial institutions. We’ll likely choose two.”

For McCarthy Ranch, the McCarthy Creekside Industrial Center is not only a real estate project, but also a family legacy. “We take great pride in this project and will not cut any corners,” McCarthy says. “We want to build a high-quality product and do it the right way the first time.”

He adds that the project’s design features will set it apart from “everything else in the market. We added more glass, and think it’s going to be some of the best-looking, if not the best, industrial distribution buildings in the valley,” McCarthy says. “These buildings are also 36-foot clear, which will set us apart further because it’s higher than the standard in the valley.”

Working Together

McCarthy Ranch’s subcontractors on the project “have been great,” McCarthy says They include RMW Architecture & Interiors, Silicon Valley Soil Engineering, Joseph J.  Albanese and Preston Pipelines.

“Preston Pipelines is a long-term contractor of ours, and they are a family business as well,” he says. “They have placed every single pipe that runs through McCarthy Ranch. Joseph J. Albanese has done all of the curbs and gutters in this project. They are a great company, and we enjoy working with them.” 

Additional subcontractors like Joseph L. Easley Construction have also been an asset. “They have done all of the concrete work,” McCarthy says, noting it’s the company’s first time working with them.

“My dad has known Joe for a long time, and the company has a great pool of subcontractors they have worked with over the years,” he says. “Also, Alex Ingram, from Ingram and Associates, is our construction manager. He has been a key part of the team and is helping us execute on the construction side of this project.”

Ultimately, McCarthy Ranch values its people and relationships. “That’s what my dad taught me, and I’m trying to teach everyone that I come into contact with who works for us the same thing,” McCarthy says. “It all comes down to the people you do business with and how you treat each other. My dad’s friends were passed down to me and we have a great relationship because we’re building on them.”

Looking Ahead

McCarthy Ranch is preparing to execute on the more than one million square feet of development it’s currently building or will be building within the next three years.

“We’re in a mode where we need to build out and execute on what’s in our pipeline,” McCarthy concludes. “In three years, we’ll start looking at more acquisitions and the next McCarthy development. We’re an opportunistic real estate development company. So we’re not focused on one type, but opportunities we see in the market we feel we can add value to.” 

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