Third Quarter 2015 Industrial Market Report

The NAI Alliance Industrial Properties Group has released its Q3 Industrial Market Report.

Overview: 

Our market maintained steady activity during the third quarter. Large deals missing in the first and second quarters reemerged in the third quarter. In addition, three new speculative buildings were completed. On a negative note, two large subleases were added to the market.  The quarter began with a vacancy of 8.7% and ended slightly less at 8.4% so the new activity outweighed the new construction added to the market.  Vacancy changes dramatically when one factors in the sublease space. The second largest building in our market, Kmart’s former distribution facility of 1,557,709sf is now available for sublease. When counting sublease space, overall market vacancy is 11.2%. In summary, market activity continues to be strong.  General sentiment amongst brokers and developers remains highly positive and we anticipate a strong finish to the year.

To continue reading, click her for the Q3 Industrial Market Report. 

Second Quarter 2Q15 Industrial Market Report

The NAI Alliance Industrial Properties Group has released its 2Q15 Industrial Market Report.

Market Summary:

Second quarter was another quarter of strong gross and net absorption.  Boosting numbers this quarter was the roof completion on a large build to suit transaction of 770,650sf for Petco in the Stead area.  This one transaction accounted for 40% of the month’s gross absorption and 72% of the month’s net absorption.  Aside from Petco, the quarter was positive with tenants continuing to slowly absorb existing product.  Another factor skewing numbers this quarter was the addition to market of the KTR speculative 566,875 square-foot facility in the Tahoe Reno Industrial Center.  Adding this property to the available inventory resulted in an increase in vacancy rate despite strong absorption. The quarter began with a vacancy rate of 8.6% and finished with a vacancy of 8.8% (8.7% excluding sublease space).  Depending upon demand, this could continue as more speculative buildings are completed in the third and fourth quarters.

To continue reading, click here for the 2Q15 Industrial Market Report.

Panattoni launches first phase of largest spec project in the region’s history!

June 4, 2015

Located in the North Valleys submarket near the intersection of Lemmon Valley Dr. & HWY 395, the North Valley Commerce Center will offer 3 buildings totaling over 1.4MM square feet.

The project, which is expected to break ground in late June on phase-one includes a 707,660sf building, the largest spec project ever built in the region. This speaks volumes regarding the confidence Panattoni has in Northern Nevada’s continued economic growth.

Reno/Sparks is headed for explosive growth, according to Mike Kazmierski, CEO and president of the Economic Development Authority of Western Nevada (EDAWN).  “Even if Tesla went away, we’d still see more growth than we’ve ever seen”, he said.

Our location and business cost advantages continue to attract large e-commerce, manufacturing and distribution companies like Amazon, Zulilly, Apple, Petco, Switch and Tesla – as well as many other companies large and small.

Market rents have steadily increased and inventory is getting tighter.   The scope of this project signifies that our economy is on the upswing and the momentum is expected to continue.

Tesla’s gigafactory in Nevada will be essential in the tech company’s plan for a new line of storage batteries

Posted: May 14, 2015

Tesla debuts a new line up of batteries it calls, Tesla Energy.  The batteries include storage solutions for residential, business and utilities.

The Powerwall home battery is one step closer to the promise of easily accessible off-the-grid power. Solar's big weakness is in generating energy during the evenings and cloudy weather, an issue that storage batteries can help remedy.  Just like cellphone technology circumvented and ousted landlines, batteries can eventually replace power lines, according to Musk.

The new Powerwall home battery is priced at $3,000 and $3,500 depending on capacity.

"A normal household can mount this in their garage or the outside wall of their house", Musk said. "It's designed to work with solar systems right off the box."

In addition to their synergy with solar installations, nine Powerwalls also can be stacked together for folks interested in more energy options or want to further reduce their reliance on the grid.  The battery can now be reserved at the Tesla website and the first deliveries are expected to arrive in the summer.

Read the article in its entirety HERE or at www.RJG.com

Follow Jason Hidalgo, Northern Nevada's guru on Tesla, technology, industry and events that shape our economy. 

Industrial Construction is the highest it’s been in Reno, NV since 2006.

With 1.6 million square feet of speculative construction, planned or currently under construction, Reno looks to have a record breaking year adding new state-of-the-art facilities to our industrial base. 

Currently under construction, Panattoni is building a 200,000sf facility in the North Valleys, along with Dermody’s 224,640sf and 402,320sf buildings.  While KTR is building 566,785sf in the Tahoe Reno Industrial Center (TRIC).   Conco recently completed a 300,000sf expansion in TRIC, with another 678,750sf building planned.

Also planned, is an additional 707,660sf facility in the North Valleys, a 855,000sf building west of town, and two buildings in TRIC of 694,640sf and 80,000sf.

Build-to-Suit construction is also underway – with Tesla’s initial 1,000,000sf in TRIC (by Portofino), and PetCo’s 771,000sf in the North Valleys (by Panattoni).   Battery Systems recently occupied a 200,000sf new built-to-suit facility in TRIC.

Construction fever has certainly hit the Reno area, and with it brings the promise of utilizing our abundant labor force – providing new job opportunities and boosting our economy. 

NAI Alliance Wins Multiple Awards at the 10th Annual Summit Awards Event 2015

((Reno, NV) – The NAI Alliance offices in Reno and Carson City received seven awards at the 10th Annual Summit Awards recognizing the top brokers in the commercial real estate industry. 

The prestigious Broker of the Decade Award was given to the broker in each sector who has won the award most over the past ten years. J. Michael Hoeck, SIOR, Senior Vice President/Principal of the Reno Industrial Properties Group was named the Industrial Broker of the Decade, and Andie Wilson, CCIM, Owner of NAI Alliance Carson City was named the Generalist Broker of the Decade. These distinguishments are only awarded once every 10 years.

NAI Alliance Senior Vice President/Principal of Retail Properties, Kelly Bland, won the 2014 award for Retail Broker of the Year for the third year in a row.

NAI Alliance Industrial Properties Group, J. Michael Hoeck, SIOR; Michael Nevis, CCIM; Dave Simonsen, CCIM, SIOR; and Steve Kucera, CCIM, received three awards - the 2014 Largest Single Sale Transaction, 2014 Industrial Brokers of the Year, and the 2014 Overall Brokers of the Year award.

Alejandra Avila of NAI Alliance Carson City received the 2014 Extra Mile award. This award is given each year to a commercial real estate practitioner who has gone above and beyond in their industry.

The Summit Awards of Northern Nevada recognizes notable achievements in the commercial real estate sectors. The Summit Awards is the only awards program of its kind in Northern Nevada to encourage and recognize distinguished commercial agents, brokers, property managers, developers and projects. The annual Summit Awards are sponsored by the Northern Nevada chapters of CCIM, CREW, and NAIOP.

2Q15 First Quarter Industrial Market Report

First Quarter 2015
Industrial Market Report

A usual slow start to the year -

Once again, the northern Nevada industrial market took a breather in the first quarter. Historically, Q1 is a slow quarter as companies are just gearing up for annual moves. Decisions to close operations happen quicker than decisions to move and expand sometimes resulting in negative absorption in the first quarter. With few closures and still good market activity, Q1 2015 exhibited stronger numbers than prior year first quarters. Brokers, developers and contractors are all busy and overall market activity remains strong. It appears 2015 will be another banner year for the northern Nevada industrial market.....

To continue reading -  Click Here For Q1 2015 Industrial Market Report  

NAI Alliance Q2 Industrial Market Report Now Available

The past three months have felt like a throwback to the pre-recession busy days of old. Phones are ringing again, tours are taking place and deals are getting done. At the end of last quarter, we were poised to expect a good second quarter and we got it. Over the past 5 years we have been discounting good news with bad news. In 2009 and 2010 the scales were
tilted strongly negative. In 2011 and 2012 the scales were balanced with much of our quarterly market report describing good news being offset by bad news.

Thirty eight transactions were completed in the second quarter of 2013 with a gross absorption total of 1,234,86 square feet (sf). This is higher than prior quarters wherein we were struggling to reach one million sf. The 38 transactions are 12% above the prior three year quarterly average and the 1.23 million sf of gross absorption is 17% greater than the average of 1,055,889 sf. Average deal size was 33,375 sf which was again 11% larger than the three year average.

.....Click here to read the entire report.

NAI Alliance Wins Three Categories at the Annual Summit Awards 2013 Event

The Retail, Industrial, and Office Properties Teams at NAI Alliance received three coveted awards at the 8th Annual Summit Awards Event held Friday April 19th at the Eldorado Hotel Casino Convention Center.

NAI Alliance Principal/Senior Vice President of Retail Properties, Kelly Bland, won the 2012 award for Retail Broker of the Year. The Broker of the year is based on total production from a broker in the retail industry. Some of Mr. Bland’s transactions in 2012 included TJ MAXX in South Lake Tahoe, and two openings of 99¢ Only Stores, as a landlord and tenant rep at the new store in Sparks at 580 E. Prater Way, and as a tenant rep for the new location at 595 South Virginia in Reno.

The NAI Alliance Industrial Property Team received the 2012 Largest Single Industrial Lease Transaction award. J. Michael Hoeck, SIOR; Michael Nevis, CCIM; Dave Simonsen, CCIM, SIOR; and Dan Oster of NAI Alliance represented the landlord, Panattoni Development Company, and tenant in this transaction and were all in attendance to accept the Award. Trex Company leased a 337,500sf building at 2375 Newlands Road in Fernley NV. Trex Company is the country's largest manufacturer of wood-alternative decking and railing products, marketed under the brand name Trex®.

And finally, the NAI Alliance Office Team received the award for the 2012 Largest Single Office Lease Transaction. Scott Shanks, SIOR; Dominic Brunetti, CCIM; and Chase Whittemore secured the lease of the 75,500sf building at 520 South Rock Boulevard for Henry Schein. Henry Schein employs nearly 400 people in Northern Nevada and this new lease reflects their commitment to the area.

The Summit Awards of Northern Nevada recognizes notable achievements in the commercial real estate sector from 2012 while also looking forward to 2013. The Summit Awards is the only awards program of its kind in Northern Nevada to encourage and recognize distinguished commercial agents, brokers, property managers, developers and projects. The annual Summit Awards are sponsored by the Northern Nevada chapters of CCIM, CREW, and NAIOP.

Congratulations to all the winners! 

NAI Alliance's Dominic Brunetti presents the Retail Broker of the Year Award to Kelly Bland.

NAI Alliance Represents Landlord in Deal to Bring Zuvo Water to Northern Nevada

Another step in the right direction for northern Nevada as Zuvo Warter is moving its headquarters to the area. Currently with a staff of 4, the company plans to increase its employee base to 20-25 by the end of the year.

Zuvo is another company that has sprung up and is committed to long-term growth in Nevada. The company is currently in the process of moving its headquarters from Mountain View, CA to the area, and expects to be operational in April.

Michael Nevis, Senior Vice President/Principal of the NAI Alliance Industrial Properties Group, represented the landlord in the transaction - MEPT Southwest Commerce - to get Zuvo into their new space at 895 E. Patriot Boulevard in Reno.

Zuvo Water LLC is a global innovator of chemical-free water products. Zuvo Water’s product portfolio is based on a patented technology platform that reproduces the photo-oxidation process that naturally occurs in the environment.

Multi-Employer Property Trust (MEPT) is an open-end commingled real estate equity fund that invests in a diversified portfolio of institutional-quality real estate assets in the United States. Founded in 1982, MEPT now has over $5.60 billion in net assets and has become one of the largest real estate equity funds in the US.

You can read a detailed article, courtesy of the NNBW, by clicking here. The RGJ also published a story on this news.

Tahoe Reno Industrial Center looking to get more van pools - good news for commuters and businesses

One of the best logistics hubs in the west, the Tahoe Reno Industrial Center (TRIC), will soon be receiving additional van pool service for employers and employees to help make the 9 mile east trip from Reno more convenient.  Currently there are three van pools running, mainly for GSI Commerce, a subsidiary of eBay, with the hopes of increasing after talks with other employers in the center.

While discussions regarding bus transportation to TRIC from the Reno-Sparks area have been on-going for some time, TRIC is located in 3 counties - Washoe, Lyon, and Storey - meaning that there is no single transportation governing board.  EDAWN, the RTC, and businesses currently operating in TRIC had discussed adding bus service from Reno.  However, RTC is unable to spend tax money to pay for services outside of Washoe County.

RTC's van pool program, started in 2005, looks like the perfect solution for employees working at businesses in TRIC.  There are a number of advantages for both the employers and employees by utilizing the van pool service, including payroll tax benefits as well as avoiding the obvious vehicle gas, maintenance, and repair fees associated with a commute.

So as the massive 107,000 acre park with 30,000 acres of potential industrial development continues to grow through the great work of EDAWN and developers in the community, there is good news for the hundreds of commuters who are looking to cut back on transportation, and convenience, costs.

You can read the full story by the Northern Nevada Business Weekly by clicking here.  For more information on TRIC, visit their website.

Forbes publishes Commercial Real Estate Forecast Update: 2013-2014

This Thursday, Forbes Magazine published their Commercial Real Estate Forecast Update: 2013-2014.  Similar to the data presented by NAI Alliance at the Builders Association of Northern Nevada (BANN) Forecast 2013 event in January, the data reflects modest growth projected for 2013 with some caveats.  The northern Nevada market is basically falling in line with a nationwide trend - growth.  Slow growth, but growth nonetheless.  Encouraging information in a number of markets.

Here are some excerpts from the Forbes piece:
Office:
- The office market enjoyed 11 consecutive quarters of occupancy growth and eight straight quarters of rent increases
- Finding large contiguous Class A spaces in downtown areas can be difficult

Industrial:
- Starting to expand, with more new deliveries than in recent years
- Vacancy rates will not fall too far, nor will rents rise too fast
- Increased volume of rented space will help the large landlords improve their efficiency

Retail:
- Seeing more absorption than construction
- Overall retail spending has only increased 4.4 percent in the past 12 months
- The positive side for property owners is the extremely low interest rate for commercial mortgages

Investment:
- The recent stock market surge may shift some money away from real estate
- Light to moderate gains are likely
- The Wall Street Journal’s most recent survey of economic forecasters shows a 17 percent risk of recession

So there are a number of positive takeaways from the data delivered by Forbes, but the rule remains - cautious optimism.  We, as both a local market and a nation, are climbing out, but there are many hurdles to clear.  Fortunately the path is bright.

You can view the entire article from Forbes by clicking here.

In addition, you can view the presentations given by NAI Alliance executives at the BANN Forecast 2013 event on the NAI Alliance YouTube brand channel by clicking here.

Work Starts on Southeast Connector in Sparks

This long awaited, and much anticipated, construction work has started.  The SouthEast Connector (SEC) will be a 6 lane arterial roadway with two new at-grade signalized intersections. The new intersections will be at Mira Loma Drive and Pembroke Drive. The SEC will originate at the existing intersection of South Meadows Parkway and Veterans Parkway on the south end and will terminate at the existing intersection of Greg Street and Sparks Boulevard on the north end.

This is very exciting for business and property owners across the region, as a new artery will create a new traffic corridor never before seen in some key regions of northern Nevada.

The article is courtesy of the Reno Gazette.

NAI Alliance Investment Market Report - Fourth Quarter 2012

NAI Alliance has recently posted its Fourth Quarter 2012 Investment Market Report.  While the overall theme was flat to slow growth, the Northern Nevada market has seen some bright spots during the slow, yet steady, recovery.

An upward trend in transaction volume in Washoe County has been occurring since the low water mark of Q1-2009.  Much of this has to do with taxes, both of our neighboring state(s) and federally, being the primary factor for the rapid increase in recent transaction volume in our region.

With new business such as Apple, Biz Chair, and Alfa Aesar moving in, as well as a continued commitment to Northern Nevada by the likes of Henry Schein, Trex, Hamilton Company, Sanofi and others mean that the region is stabilizing and showing conservative signs of growth. 

To read the full Investment Market Report, including vacancy rate data and in-depth thoughts on the California to Nevada shift, click here.

 

NNBW Reports on the BANN Forecast 2013 event - NAI featured

Click here to read the Northern Nevada Business Weekly's report on the Builders Association of Northern Nevada (BANN) Forecast 2013 event.  Commercial real estate content provided by NAI Alliance - J. Michael Hoeck, Senior Vice President Industrial Properties, Scott Shanks, Senior Vice President Office Properties and Mark Keyzers, Senior Vice President Retail Properties.

Michael Nevis and J. Michael Hoeck Secure Lease for Trex

Trex Company leased a 337,500sf building at 2375 Newlands Rd in Fernley NV. Trex Company is the country's largest manufacturer of wood-alternative decking and railing products, marketed under the brand name Trex®. The company was formed in 1996 through the buyout of a division of Mobil Corporation and went public in 1999. Trex Company is headquartered in Winchester, Virginia, with manufacturing facilities in Fernley, Nevada and Winchester, Virginia. J. Michael Hoeck, SIOR; Michael Nevis, CCIM; Dave Simonsen, CCIM, SIOR; and Dan Oster of the NAI Industrial Properties Team represented the landlord and tenant in this transaction.

View the NAI Alliance Presentations from the BANN Forecast 2013

Click here to view a PDF of the presentations of J. Michael Hoeck, Senior Vice President Industrial Properties, Scott Shanks, Senior Vice President Office Properties and Mark Keyzers, Senior Vice President Retail Properties from the Builders Association of Northern Nevada (BANN) Forecast 2013 event Tuesday January 15.

Builders Assoc Forecast 2013 Featuring NAI Recap - by RGJ

Executives from NAI Alliance Commercial Real Estate were lead presenters on the commercial real estate market at the Builders Association of Northern Nevada (BANN) “Forecast 2013 and Beyond” event Tuesday January 15, 2013 at the Atlantis Hotel Casino.

Presenting from NAI Alliance were the following:

• J. Michael Hoeck, SIOR – Senior Vice President/Principal - Industrial Properties Group
• Scott Shanks, SIOR – Senior Vice President/Principal - Office Properties Group
• Mark Keyzers – Senior Vice President/Principal - Retail Properties Group

Expressing cautious optimism, NAI Alliance expects vacancy rates to drop 1 percent for each segment, but still maintain double-digit percentages ranging from 12.3% in industrial and 17.7% in retail spaces.

You can read the full recap article written by the Reno Gazette by clicking here.   

The full presentations can be viewed on the BANN web site by clicking here. 

Insource manufacturing, not outsource!

Posted by: Dan Oster
Industrial Specialist

775 336 4665

doster@naialliance.com

 As a member of the Industrial Properties Group, Dan has participated in the sales and leasing of a wide variety of Industrial properties from 1,000 to 700,000 sqft in Northern Nevada. Dan's primary goal is to provide unsurpassed customer service to the clients he represents.

A trend first noted in February of 2010, ever more manufacturing companies are deciding to insource or self perform manufacturing work.  By ending tax breaks to companies that outsource and increasing manufacturing tax deductions, the stage has been set for a revitalized manufacturing sector according to a recent article by the US Treasury Dept.

Apart from creating great middle class jobs, manufacturing accounts for 9% of employment, 12% of GDP, 60% of exports, and 69% of private sector R&D spending. Furthermore, the innovations from such R&D transcend beyond the company and have a multiplier effect within the local communities where the manufacturer is located. As we noted in a recent series of articles on the economic advantages of relocating from California to Nevada, firms are likely to enjoy a much higher degree of profitability with a Nevada address.