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.

DON’T HESITATE IN A LANDLORD’S MARKET!

Posted: May 19, 2015 

The Reno/Sparks Industrial Market is bustling with activity.  Tenants who are taking time to decide on space, or pushing back too hard on lease terms are losing out. 

It’s a Landlord’s market!  If you find a space that fits your needs, don’t hesitate! 

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. 

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  

Ground Breaking Ceremony for First New Constuction in N. Nevada in Nearly 2 years Mon. February 10 - 1 p.m.

Lake Washington Partners, a commercial real estate firm owning, managing and developing properties across the United States, will break ground Feb. 10 for phased development of 1.5 million-square-feet of distribution/warehouse space within Spanish Springs Business Center. Seattle area-based Lake Washington Partners purchased the 66-acre site from Spanish Springs Limited Partnership in October, 2013.

The ceremony is Monday Feb. 10 at 1 pm at 450 Ingenuity Ave. with representatives of Spanish Springs Limited Partnership, including Hawco Properties, the Economic Development Authority of Western Nevada (EDAWN) and Washoe County in attendance.

With an anticipated completion in late 2014, the first phase will be a 750,000-square-foot distribution center for SanMar Corporation – the first new construction in Northern Nevada in nearly 2 years, making it a fantastic story in terms of positive economic activities impacting the area.

The NAI Alliance Industrial Property Group of Dave Simonsen, SIOR, CCIM, J. Michael Hoeck, SIOR, and Michael Nevis, CCIM, represented the owner of the land, Spanish Springs Limited Partnership, in the transaction. Representatives from NAI Alliance will be in attendance at the event and will be available for additional comment.

NAI Alliance Represents Both Sides in Sale of 61,000sf Building in Reno

Another good win continuing the momentum heading into 2014 as the NAI Alliance Industrial Properties Group of Dave Simonsen, Senior Vice President, SIOR, CCIM, J. Michael Hoeck, Senior Vice President, SIOR, Michael Nevis, Senior Vice President, CCIM, and Steve Kucera, Industrial Specialist recently completed the sale of the 61,152 square foot manufacturing facility at 400 Western Road in Reno, Nevada. The stand alone facility is situated over 5.0 acres of land.

NAI Alliance’s Dan Oster, Senior Vice President, SIOR represented the new owners of the building, ECO Windows. ECO Windows is relocating to the new, larger facility from their current location in Sparks, NV. 

The industrial market has seen a great deal of activity in the last two quarters of 2013.  Cautiously optimistic on the recovery, as we like to say, but very encouraging activity as we close 2013 and look forward to 2014.

NAI Alliance Industrial Properties Group Secures 60,000 SF Lease in the Reno Aircenter

The industrial market in Northern Nevada continues to see a positive uptick in 2013.

The NAI Alliance Industrial Properties Group of J. Michael Hoeck, Senior Vice President, SIOR, Dave Simonsen, Senior Vice President, SIOR, CCIM, Michael Nevis, Senior Vice President, CCIM, and Steve Kucera Industrial Specialist has recently secured a 10-year, 60,000 square foot lease for Winzer Corporation at 4795 Longley Lane in Reno, NV.

The space is part of the 13MM square foot portfolio IndCor operates in Reno.

Winzer Corporation has been in Northern Nevada since 2004. Winzer opened a regional distribution center in Sparks, NV to expedite services to their west coast franchises and their customers.

The move to a new 60,000 square foot location provides additional space to accommodate their growth. The facility will also feature enhanced automation and fulfillment solutions as well as storefront capabilities.

NAI Alliance Industrial Group Receives National Recognition at SIOR Conference

The NAI Alliance Industrial Properties Group was recognized by Panattoni Development for significant transaction volume at the Society of Industrial and Office Realtors® (SIOR) Fall World Conference in Chicago, IL held October 24-26.

Among nationwide lease transactions by SIOR professionals for Panattoni, the NAI Alliance Industrial Team ranked second overall with the 337,500 square foot lease to Trex Company at 2375 East Newlands Drive in Fernley, NV. NAI Alliance also brokered the sale of this property, which placed them third nationwide on a square footage basis for a property sale.

SIOR designees in the NAI Alliance Industrial Properties Group are J. Michael Hoeck, Senior Vice President, Principal and Dave Simonsen, Senior Vice President, Principal.

Q3 Industrial Market Report Now Available

The third quarter of 2013 in the industrial market was exceptional here in Northern Nevada. The absorption of industrial space in the Reno-Sparks market in the third quarter — 1.8 million square feet — was more than five times greater than absorption in the same quarter last year. 

Bargains have nearly disappeared as the vacancy rate in industrial properties stands at 10.5 percent.  That's nearly a 2% drop in vacancy rates.  There were 9 transactions of more than 95,000 square feet.

So while we don't want to get too carried away, 2013 has continued to reward our cautious optimism in the industrial market.  The fourth quarter is a bit more concerning with governmental activity creating some skepticism on when and where to grow.  But right now, we will continue our optimism for Northern Nevada and the rebound we're seeing.  Good for the economy.  Good for jobs.  Good for Northern Nevada.
 
Click here to download the entire report.

You can also view an article published by the Reno Gazette Journal on the news by clicking here.

Myers Industries Moves Back to Sparks Facility - More Jobs to Northern Nevada

On the heels of the announcement of Aragh Group moving to McCarran, NV in the largest user transaction of the year to date, Myers Industries Lawn & Garden recently announced that they are returning to Sparks, NV.


Myers Industries owned the facility at 550 Spice Island - a property that had been brokered by the NAI Alliance Industrial Properties group of J. Michael Hoeck, SIOR, Dave Simonsen, SIOR, CCIM, and Michael Nevis, CCIM.

Myers initially moved out of the building in 2009, but as part of an asset reallocation, decided to move back to the area to get a better stronghold on their western states distribution, particularly in the Pacific Northwest.

Northern Nevada continues to be an attractive option for advanced manufacturing organizations. Skilled workforce, business friendly climate, and proximity and access to the Western United States are just a few of the reasons companies are moving in.

The combination of jobs being created in the next 6 months between Ardagh and Myers totals over 160. A summer of great news with more on the horizon. Fantastic work by the NAI Alliance Industrial Properties Group, EDAWN, and the Governor's Office of Economic Development in helping ensure that the future continues to be trending in a positive manner here in Northern Nevada.

NAI Alliance Industrial Team Represents Tenant - Ardagh Group - in Largest User Transaction Thus Far in 2013

Luxembourg-based Ardagh Group recently secured the $11.5 Million purchase of property at 900 Waltham Way, McCarran, NV in the Tahoe Reno Industrial Center. Dave Simonsen, CCIM, SIOR; J. Michael Hoeck, SIOR; and Michael Nevis, CCIM of the NAI Industrial Properties Team represented Ardagh Group in this transaction. 

The purchase includes the acquisition of an existing 330,000 square foot Class A manufacturing facility and two 18 acre parcels on the east and west side of the building for future expansion. Ardagh Group had looked at 37 facilities in three (3) states before deciding on the new location in Northern Nevada. 

The move will bring approximately 140 technical jobs to Northern Nevada throughout the next five years, including 72 jobs within the first six months. In addition to job stimulus for the area, Ardagh will have a total capital investment of close to $80 Million - $20 Million dedicated to building retrofitting and an additional $60 Million for equipment and installation. They’re expecting to produce nearly 3 Million cans per day from the state-of-the-art, advanced manufacturing facility beginning in January 2014. 

Ardagh Group is a global leader in glass and metal packaging solutions for most of the world’s leading food, beverage and consumer brands. Ardagh Group generates $5.5 billion in worldwide sales and produces 32 billion containers annually for such customers as Coca-Cola, ConAgra, InBev and Bumble Bee Foods. The company has operations in 25 countries and employs 18,000 people in more than a hundred facilities. 

The company’s U.S. metal packaging operations are based in Carnegie, Pa. In addition to the new facility in McCarran, NV, the company has facilities in Bloomsburg, PA, Weirton, WV, Conklin, NY, Terminal Island, CA, and the recently announced expansion in Roanoke, VA.

Industrial Deals Painting a Bright Picture in Northern nevada

Ahead of today's new company announcement by EDAWN, the Northern Nevada Industrial Commercial Real Estate Market has been buzzing for the past few months.  

Published by the Reno Gazette Journal this week was an article focusing on the Industrial market and the millions, yes millions, of square feet that has been occupied this summer.  Dave Simonsen, Senior Vice President, Principal of the NAI Alliance Industrial Properties Group provided much of the commentary for the piece.

The main point is that, currently, companies are looking to expand.  More importantly, they are looking at Northern Nevada as a very attractive option.  A total of 38 transactions were closed in the second quarter of 2013 alone, bringing the vacancy rate down to 12.9%.  Diversified Distribution Services, UTI/Starbucks, Arrow Electronics, and Jacobsen Companies are just a handful of the companies expanding in Northern Nevada.

Today, EDAWN will be announcing a company bringing close to 140 jobs to Northern Nevada, and will follow up on Monday with an announcement of a new company who will inject another 150 jobs to the market.  

Good things are in the air for jobs and new business in Northern Nevada.  Now if somehow we could get out of fire season....

You can view the entire article by the RGJ by clicking here.

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 Global Economic Briefing - Thursday July 11

Please join Dr. Peter Linneman, NAI’s Chief Economist & Jay Olshonsky, NAI Global President July 11, 2013, 12:00 PM – 1:00 PM Eastern for an enlightening briefing on the global economic environment.

Where are we in the recovery? Which markets still hold investment opportunities?  Dr. Linneman will address several topics during this Web conference including:

• Real Rent Analysis: Which markets are below historical averages?
• A comparison between this cycle and the 1990s
• More reasons the Euro will fail
• How we are repeating Japan’s mistakes
• An update of capital markets
• Social Security implications as the boomers retire

 Registration is required for the event.  Please click here for registration instructions and information. 

Looking Beyond the Price Per Foot in Commercial Realty

Article published in the NNBW "How To Analyze, Buy Commercial Real Estate" special June 3, 2013. Contributed by the NAI Alliance Investment Services Group.

Successfully investing in commercial real estate has never been easy and today’s sophistication and tight margins make this as true as ever. This is true from both the investor and broker standpoint. Many potential investors have typically done quick search, perhaps through a commercial real estate search engine, to find properties that fit their spatial and/or return requirements, drive the properties and search a few comparables, and then try to get the best value based off of the information they were able to gather. 

Is this really the best way to identify CRE opportunities? There are a number of approaches to determining value. A good broker can quickly acquire the same data using the aforementioned methods. In residential real estate, this can be a pretty reliable indicator of value and will typically satisfy the client. However, in commercial real estate, an experienced broker knows that this simplistic approach has its shortcomings as it oftentimes is akin to comparing apples to giraffes. Price per square foot isn’t the only barometer mark for achieving the best value, it’s just one component. 

Savvy brokers know that the most important benefit they can provide a prospective investor is their knowledge of market conditions, their understanding of the client’s needs, and ultimately the ability to marry the two together to achieve the best possible deal. Specific to comps, a per square foot number on a land deal might get us in the ballpark but a per square foot on a leased asset may tell us virtually nothing as market strength, quality of tenant, lease type and length, age and quality of the asset, debt considerations and the seller’s cap rate all play predominantly in assessing an accurate value.

Capitalization rates are one of the primary metrics you hear about when comparing income producing properties. Quite simply, a capitalization rate represents a property’s annual net income divided by the purchase price. It is called a cap rate because the inverse of the percentage is how many years it will take to full capitalize the property based off of the first year’s net income. For example, an investor buys a property at a 10% cap rate, it will take (1/.10) 10 years to capitalize, or pay off, the property. The cap rate is a function of how much return an investor expects for their perceived risk associated with the property. By being active members in the commercial real estate market, good brokers not only know what cap rates have been paid on all current transactions but they are able to qualify the cap rates with an analysis of the physical asset and the asset’s existing and future income stream. This combined with a clear understanding of the client’s goals allow for the establishment of a proper cap rate target for a particular property. 

A quality broker understands all of these aspects and is able to confidently and effectively convey to a client how a particular opportunity is priced against the competition and thus how it may perform in the market over time. Engaging a professional, experienced brokerage firm from the beginning is will best insure identifying the opportunity that best fits the investment goals of a particular buyer. 

In our initial meetings with clients, it is paramount that we go over every aspect of their current and future real estate needs and goals in order to formulate a strategy. Understanding an investor’s profile is one of the key factors in determining what type of properties will be considered. Some example investor profiles are; owner/user, high net individuals, moderate sized investment companies, and institutions. Institutional investors are organizations that control large sums of money for diversified investment in securities, real property and a range of other investment vehicles. Institutional investors include banks, insurance companies, retirement or pension funds, private equity firms, hedge funds, investment advisors and mutual funds, just to name a few. 

In the end, as commercial real estate brokers, we understand that today’s investors don’t select their broker solely by what we do but also because of why they do it. And in Northern Nevada, this is key. Commercial real estate brokerage these days is much more than just answering calls made off of listing signs but now requires a passion for the community and its growth, a real time knowledge of the market at all levels and a genuine and deep understanding of a client’s goals., In doing this, a quality broker can provide the services, options, and preparedness that the client demands. That’s the win-win all clients deserve. 

NAI Alliance Releases Q1 2013 CRE Industrial Market Report

NAI Alliance is pleased to provide our Q1 2013 Industrial Market Report for commercial real estate in Northern Nevada.  We’re heading in the right direction.  A neutral first quarter in 2013 is much more positive than the past 3 years of negative net absorbtion in prior first quarters.

Starting level heading into Q2 means we have no holes to dig out of.  That alone creates optimism for the market.  Rents have not increased on industrial properties, but we do foresee rent increases for specific property types in the near future.  Corporate earnings, housing, business investment and unemployment are all trending in the right direction helping our economy.

Click here or on the image below to view the entire report.  Also, if you'd like to sign up to receive our market reports, you can click here.