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Northern Nevada Real Estate
Volume 2,Issue 2
A special publication brought to you by the
COMMERCIAL | INDUSTRIAL | RETAIL | LAND | OFFICEMonday, July 27,
2015 | www.nnbw.com
Medical players added to froth in Q2 office market
Apartments on track as hot investments
Carson Valley food businesses find right fit in industrial
park
By Steve [email protected]
The end of the second quarter of the year means its time to take
the measure of Renos office market. Checking in with Tim Ruffin and
Melissa Molyneaux, the office team at Colliers International, the
duo shared a couple of takeaways as they calculated the level of
leasing activity and sales.
One big dealmaker: Renown Health. Reno had just the right
prescription that the healthcare provider sought in a new home and
additional office space. The operator of hospitals and other
healthcare facilities purchased the Reno Tahoe Tech Center at 10315
Professional Circle Drive.
Ruffin said Renown picked up the South Meadows property for $11
million, which he said was a notable transaction for the quarter.
He said the 63,000-square-foot building has been considered
distressed by virtue of its low vacancy.
The freeway frontage is outstanding, said Ruffin, who said
Renown plans to make the building a strong focal point of its
Hometown Health insurance arm.
In addition to acquiring the property in South Reno, Renown has
also taken over 16,000 square feet of space at 50 W. Liberty.
Ruffin said Renown plans to office some of its administrative staff
downtown.
Not to be outdone, St. Marys Regional Medical Center will take
on the former Scolaris grocery store and is in the market to
co-lease space with UNR for the medical schools residency program,
Molyneaux said.
Another healthcare business called AeroCare leased the old
AT&T data center at 1450 Vassar Street, which will be a call
center. The nearly 30,000-square-footbuilding has significant
up-to-date IT infrastructure capacity and has been well-maintained,
said Molyneaux, although it had a few dated and quirky features,
such as old telephone booths in the lobby. The new tenant plans
some improvements before taking occupancy.
The increases left the overall office vacancy rate flat for the
quarter at 15.7 percent, which is just a nudge down from the
previous quarters 16.2 percent, according to the Colliers team.
The slow, steady upward pace of leasing will continue in the
third quarter, said Ruffin.
Two things: the nicest Class A buildings are filling up and the
market for the most part still cant justify new (office building)
construction as in past years.
One exception is the Kietzke Lane corridor, where Ruffin said
some significant construction development is underway.
continued on page 9
By Sally [email protected]
The sale and opening of multifamily properties slowed to a brisk
trot after performing at a gallop early in the year.
The market pace is expected to pick up speed during the
remainder of the year, but new apartment construction could trail
far behind the need.
Floyd Rowley, senior vice president, investments of the Johnson
Group, sees the current period of normalcy as the drawback of ocean
water before the arrival of a tsunami in terms of job growth
crashing into housing availability.
Unless we build a ton of houses, Im not sure where everyone will
live, Rowley said.
During the recession, C-class apartments were 40-50 percent
full. Now they are 80-90 percent full.
Even with the potential of 6,200 new apartments entering the
market in the next couple years, it may not be enough.
At the Northern Nevada Housing Summit in early July, Mike
Kazmierski, president and CEO of the
Economic Development Authority of Western Nevada, predicted the
region could expect 52,400 new jobs and a population growth of
64,700, conservatively.
We have a housing crisis, Kazmierski told the gathering hosted
by Governor Sandoval. We should be building, not 200 homes, but
more like 2,000 homes.
For investors, prospects for multifamily complexes in the
Reno/Sparks metro area look like winning bets.
Reno is definitely on the map among investors, said Aiman
Noursoultanova, senior vice president investment properties at
CBRE.
Thats really exciting for us in the business.
In the first quarter of 2015, 939 multifamily units changed
hands, according to figures released by CBRE.
continued on page 8
By Susan Ditz
The desire for more handmade, locally sourced, healthy and
environmentally friendly food products has resulted in a growing
opportunity for culinary entrepreneurs in northern Nevada.
Small companies are springing up all over the region. However,
artisan food developers who want to live and work in the Carson
Valley face a big challenge finding the right space to create their
distinctive small-batch products.
Health regulations can require daunting and expensive property
upgrades to ensure food safety. For most the solution is leasing
industrial space where the necessary improvements such as walk-in
refrigeration and special drainage, are already in place. But that
kind of property isnt always easy to find at a price point a food
entrepreneur can afford.
Industrial parks in Minden and Gardnerville are currently home
to everything from churches to thrift stores to auto repair shops,
manufacturing and distribution centers. Its an appealing area,
especially for smaller mom and pop shops, because the quality of
life is so great in the region, according to local agent Dick
Silvera, who has run his commercial real estate business in
Gardnerville for 20 years.
But we are running out of industrial space, he says. Following
the recession, rents have not come back to where they were, so no
new space is being built, and we are in dire need, especially for
buildings of 20,000 square feet or larger.
Therefore, due to limited options, small food production
operations in the area he says only make up, about 2-3 percent of
the total tenant population. Even though the average 55 cents per
square foot price tag (plus CAMs of 10-12 cents) is higher than
comparable space in the Reno area where there is more inventory, he
gets regular inquiries from food entrepreneurs who want to get
established in the Minden/Gardnerville area.
One of the real local success stories is Killer Salsa in
Gardnerville, which received the Entrepreneur of the year Pioneer
Award in 2013 from the Northern Nevada Development Authority and
offers a line of nine fresh, cooked and dehydrated products now
available online at www.killersalsa.com, through
continued on page 9
Plans are underway by LandCap Development to transform the hotel
portion of the former Silver Club/Bourbon Square casino on
Victorian Square in Sparks into a 98-unit apartment building. Sally
Roberts/NNBW
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2 | Northern Nevada Real Estate Journal | Monday, July 27, 2015
| www.nnbw.com
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Northern Nevada Real Estate Journal | Monday, July 27, 2015 |
www.nnbw.com | 3
Retail markets are moving in the right directionBy Anne
Knowles
Shopping season is in full swing again in northern Nevada.
Economic indicators for the areas retail market are all moving in
the right direction, continuing a positive trend that started last
year. Vacancy rates, for example, are down while net absorption is
up and lease rates are finally on the rise after stagnating for
years. Vacancy rates are down to 13.5 percent overall, the best
theyve been since 2009, before things started really crashing, said
Roxanne Stevenson, senior vice president, Colliers International in
Reno. For the first time in a long time asking rents have
increased, to about $1.27 per square foot. And net absorption was
about 62,000 square feet in the first half of the year. Another
commercial broker in Reno, CBRE, has slightly different numbers.
According to Shawn Smith, vice president, vacancy rates are down to
14.3 percent, net absorption in the first half was 81,886 square
feet, including 11,000 square feet of new construction at the
Legends in Sparks, and the average lease rate stands at $1.22
triple net. Also, fewer than 20 vacant big box stores remain on the
market. Both agree, though, the news is good. Reno is the buzz
right now. We are back on the radar screen, said Smith. National
chains and franchises are both looking. That includes a major
sporting goods retailer expected to lease 50,000 square feet in the
Meadowood Mall, which has been delayed by building height
restrictions in the area due
to its proximity to the Reno Tahoe International Airport,
according to Smith. A Sleep Number, the national mattress store, is
being built on the northeast corner of South Virginia Street and
Neil Road, in the lot where Joes Diner recently stood. A second
space in the building is currently being marketed, Stevenson said.
A few national retailers have been touring the area and looking at
options, she said. A couple are brands within brands, a new name to
our market but under the umbrella of another brand. Bernie Carter
said he has a letter of intent from a national retailer new to the
Reno market for the 15,000 square-foot, first floor of the
converted downtown post office. The local developer expects the
retailer to open its doors sometime in 2016. Some shops in the
historic buildings basement are already or soon will open for
business, including a florist, barber shop and chocolatier. Four of
five of Carters Midtown retail projects are fully leased,
including
two restaurants, Two Chicks and Sp, a new yoga center and a bed
and bath supply store. Carter said he has two, 1,200 square-foot
spaces open in the popular Midtown location. Another Midtown
project is being rebranded. Blake Smiths multi-use project
initially known as The Cove is now called 1401 Midtown, for the
South Virginia Street address of the Heritage Bank building that
forms the core of the plan. Smith is turning the 9,000 square-foot
building into a 21,000 square-foot mix of residential, office and
retail space. About 3,000 square feet will be apartments, with
eight single-family homes added in the back. About 12,400 square
feet of 17,200 square feet of commercial space is already leased to
three future tenants and another 2,000 square feet has a letter of
intent. Smith is building out about 2,900 square feet on spec for a
restaurant. Smith also recently purchased a 3,300 square-foot
building with 20
parking spaces at Lake and Second streets, near the Reno Aces
baseball stadium, which he plans to lease to retailers and a
restaurant. Carter and Smith are well-known local developers, but
much of the recent action in the retail market has come from
outside investors, another good sign. CBREs Smith says 80 percent
of recent retail property purchases, such as the Scolaris building
in the Southwest Pavilion, were made by outside investors. Most are
from California where product inventory and cap rates the ratio of
net operating income to property asset value are tight. For
instance, Jim Kaplan, an Incline Village resident who previously
invested back east, made his foray into the Reno market when he
recently purchased The Crossing shopping mall at the busy,
southwest corner of South Virginia Street and Neil Road. Since
then, he has leased to three new tenants Ocean Spa and Nails,
Custom Apparel Ink and Bear Bums, the citys only cloth diaper
service. Kaplan is in the process of upgrading the sites
landscaping, signage and building facades, and has three more, 750
square-foot spaces for lease. Our occupancy rate has gone up from
70 percent to 90 percent, said Kaplan, who is manager of The
Crossing SC LLC, which owns the property. Its a great location, a
hidden gem thats not been utilized to its fullest potential.
The Summit in south Reno at Mount Rose Highway and South
Virginia Street has recently added new tenants, including lulumon
athletica and Miguels Mexican restaurant. Photo courtesy The
Summit.
We appreciate working with you on your newest distribution
center.
980 Sandhill Road, Suite 100 | Reno, NV 89521775-829-6112
www.panattoni.com
Thank you, Petco, for allowing us to serve you as you continue
to serve pet owners across the West.
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4 | Northern Nevada Real Estate Journal | Monday, July 27, 2015
| www.nnbw.com
Spec construction of office space slated for Kietzke
corridor
A simple lease renewal may not be that simple
By Justin Noin
The northern Nevada office market has not seen any new
development exceeding 10,000 square feet in nearly a decade. What
has been built has been build-to-suit product with tenants already
in place before dirt is moved. Speculative construction in the
office market has been halted for some time. In fact, northern
Nevada has not seen a spec office project since 2008. Between 2006
and 2010, the market experienced a steady increase in vacancy
rates. From 2010 through most of 2012, lease rates continued to
drop. Developers could not construct a building and lease it for
the costs of development. The result was that tenants were limited
to pre-existing buildings, though rents were lower. While vacancy
rates began to drop in 2010, lease rates did not see an increase
until nearly the end of 2012. Now that we are past one of the most
significant economic downturns in our history, lease rates have
begun to approach the level to warrant new construction. Tenants
are going to begin to see more options as demand continues to grow
and ground up projects are now feasible for developers and tenants
alike. As always, some submarkets in the area are stronger than
others and
spec building is beginning to pencil for property owners and
investors. The Kietzke corridor has continued to be one of the most
dominant submarkets for office users. This area continues to have
lower vacancy rates over time in good market conditions and not so
good market conditions. In fact, plans are moving forward on the
first speculative office product to be built in northern Nevada in
more than seven years in the Mountain View Corporate Center. The
center is located past the roundabout at the south end of Kietzke
Lane. The site has freeway visibility, the space to accommodate
needed parking and the surrounding
buildings (all Class A) are some of the best quality in the
market. McKenzie Properties will break ground late summer on a
40,000-square-foot speculative office building on the 5.5-acre
parcel next to the City National Bank building. This area will
remain one of the most desirable submarkets in town and we believe
there will be significant tenant demand in Mountain View Corporate.
The new Class A building is scheduled to be complete in July of
2016. It will be four stories with a view of Evans Creek and the
surrounding mountains. Finishes will reflect the same high quality
as the surrounding product.
Not only can we expect to see more and more additions to the
inventory in the office market, it is truly a market signifier to
see speculative development begin. Confidence in the northern
Nevada commercial real estate market is higher than it has been in
a decade and the result will be more and more movement and
construction in 2015 and 2016.
Justin Noin is a property asset manager with McKenzie
Properties, a third-generation, northern Nevada developer and
construction company. For more information, visit
www.mckenzieproperties.com.
By Tom MIller
For tenants of industrial and commercial property, a lease
renewal is almost a certainty at one point or another. From a
tenants perspective, if the space is working well and the landlord
and leasing agent are making it easy, whats the harm in simply
signing the renewal and getting back to business? Thats certainly
one way of handling things and it may even have its virtues.
Signing the renewal gets it off your desk so you can focus on your
business. But there are a few critical aspects to the simple lease
renewal that are worth considering first. To begin, be very clear
about who is working for whom in this process. The landlord has
specific goals for his real estate asset and achieving a certain
yield hurdle for his investment is certainly one of them. The
landlord strives to secure both the highest rental rate and high
annual rent increases while minimizing his outlay of resources to
achieve those goals. The tenants interests are all on the opposite
side of the negotiating sheet the lowest possible rent, the lowest
annual rent increases and possible improvements to the space at
landlord cost. You can try to negotiate these points with the
landlords agent on your own, but understand that the landlords
agent and the landlord both spend all day,
every day dealing with lease transactions in the local market.
How much lease negotiating experience do you as the tenant bring to
the table? This is precisely where the benefit of an agent who
solely represents your interests becomes clear. Even if you know
and like the landlords agent, never forget whom he or she
represents and remember that it isnt you. One agent can legally
represent both the tenant and the landlord with the execution of a
special document that acknowledges both parties are aware of and
agreeable to this unique arrangement. Its similar to having one
lawyer representing both the prosecution and the defense in the
same case. Consider how effective one agent can be trying to serve
two clients with opposing interests. Perspective can also be
valuable in this process. Dont simply view it as a renewal. The
prudent tenant considers it an opportunity for renegotiation, or at
the very least, a chance to review the details of the agreement.
From this standpoint, bringing in a specialist is a sensible move.
Whats more, by delegating this important
item to a competent experienced professional, youre free to run
your business, secure in the knowledge that the process will
progress rapidly with your interests skillfully represented. Your
agent will ask questions and be very clear about your short, mid
and long-term business models with attention to
growth, potential downsizing or any other special needs now and
in the future. Your agent will perform a detailed lease review and
produce a written abstract outlining the critical business points
in the lease and all amendments. The agent will review previously
negotiated terms that may now be dated, as well as anything that
would benefit from updates, revisions or eliminations. For example,
hell look over any tenant improvement costs amortized into the
initial lease rate that may need adjusting or eliminating. Just a
focus to this detail alone can have a significant impact, so as a
tenant, its wise to honestly consider whether or not one has the
ability to conduct a review like this solo. Another important and
obvious consideration is lease
rates. An agent can track a tenants current rate in comparison
to market rents over the same time period. As the market has
experienced wild pricing swings in the last six years, current
input on todays rates is a necessity during renegotiations. An
agent can supply statistical facts, not approximations, of relevant
comparable transactions, including all the fine points that bring
the comparable lease rates into sharp focus. Market facts should
also be brought into the equation. An agent can produce specific
submarket vacancy and absorption numbers that are clear and
accurate indicators of what a given property type, size and
submarket is experiencing today. These data points are essential
for setting a realistic price/terms hurdle to shoot for on a
renewal. An agent also brings a credibility factor to the renewal
process. When an agent represents the tenant, the landlord
understands that the renewal will need to be a market renewal to
gain support from your agent. In short, an agent provides a free,
professional and timely service from which any tenant will benefit
even for a simple lease renewal.
Tom Miller is the president of Miller Industrial Properties, one
of northern Nevadas leading industrial real estate brokerage
firms.
McKenzie Properties plans development on this lot at the south
end of Kietzke.
Courtesy McKenzie Properties
Tom Miller
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Northern Nevada Real Estate Journal | Monday, July 27, 2015 |
www.nnbw.com | 5
5441 Kietzke Lane Suite 100 | Reno, Nevada 89511775.324.7400
Underwritten by Chicago Title Insurance CompanyMember of IREM,
NAIOP, CCIM, and CREW
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NAIOP is an association of developers, owners, investors and
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Randi Reed Chapter Executive | [email protected] |
Phone: 775.386.2467 www.naiopnnv.com
Our Members Are The Principal Players Who Shape The Industry In
Our Region
-
6 | Northern Nevada Real Estate Journal | Monday, July 27, 2015
| www.nnbw.com
Despite hurdles, retail growth underway in MidtownBy Ian
Cochran, CCIMand Greg Ruzzine
If youve spent any time in the Reno-Sparks area in the past two
years, you may be familiar with the Midtown District just south of
downtown Reno between California Avenue and Plumb Lane. Even more
noticeable are the changes that the district has seen over the past
few years, consistently improving and expanding. We have had the
good fortune to be part of this amazing growth of this area over
the past several years.
At the inception of the Midtown District, we clearly remember
several skeptics questioning whether this idea would really take
ight. With developers such as Bernie Carter, Dark Horse Investments
and Thomas Y. Johnson of TY Johnson Investments leading the charge,
the transformation of the Midtown District into the hippest new
area of town has been exponential.
With a healthier local economy and a clear vision for the
Midtown District, tenants and investors alike are ocking to the
area eager to find their place in this ourishing market. For
tenants, there are several excellent options such as the 777 Center
Street project.
Many may identify the 777 Center Street project as the former
Maytan Music Center. To some, this building was a Reno
landmark.Nearly everyone who has grown up in the area may have
gotten their first trumpet, trombone, piano or musical instrument
from the Maytan Music Center.
Owner Thomas Y. Johnson has taken special notice to this fact
and has worked hard to preserve some of the history of the Maytan
family during a complete renovation.
On the north side of the building, you will find a mural of
children playing various instruments which Johnson is currently
restoring as a remembrance of the Maytan legacy for all to
enjoy.
Aside from this mural, you wont recognize this property due to
its modern new design and elegant lighting. With the building
nearing completion, Johnson has worked to secure several
restaurants and retail tenants and is eager to see the project come
alive.
From an investors perspective, there arent nearly as many
options as there are for tenants looking to root themselves in the
Midtown area.
Local Sperry Van Ness ofces are currently working with several
investors who are eager to acquire property in the area.
Regardless of property type or location, slim available
inventory and the lack of sellers have made the barrier to entry
difficult. Due to the age of the properties located in the Midtown
District, most have been owned for several generations by the same
entity and have produced a steady income stream for their
owners.
The challenge has been attempting to match the owners perceived
value to the current market value of the property. In addition,
there are a handful of retail properties in Midtown that would need
significant renovations in order to compete with new developments
such as Sticks at Midtown or 777 Center Street.
When you combine the rehab costs with the owners perceived value
of the property, more times than not, the hurdle is too great for
either party to overcome. We foresee the value of these properties
lining up at some point in the near future.
Dark Horse Investments is one of the newest investors in the
market,
securing two properties in Midtown.One of their projects they
will soon
begin renovations on is 1039 S. Virginia Street. They strive for
a product similar to Sticks at Midtown and 777 Center Street with a
mix of retail and ofce tenants.
One of their rst tasks will be stripping the white paint from
the front of the building and restoring the original brick. Upon
its completion, this project will surely be a highly desired
property for tenants looking to be in the Midtown area.
Average asking lease rates in the Midtown District for existing
second generation retail spaces are between $1 and $1.25 per square
foot based on upon triple net lease terms.
With a triple net lease, the tenant is also responsible for the
proportionate share of all operating expenses associated with the
property.
Lease rates for new construction such as Sticks at Midtown or
777 Center Street are between $1.65 and $1.85 per square foot based
upon triple net lease terms. Lease rates also vary based upon size,
location and build out.
With the improving health of the Reno economy, we believe it is
safe to assume that the growth and development of the Midtown
District will only continue to accelerate.
If you have yet to experience the Midtown District first hand,
we encourage you to take an afternoon or evening and explore the
area. You can stop in at Chuys Mexican Kitchen and enjoy a
specialty margarita, sit down at Midtown Eats for a delectable
burger or head to the patio at Death & Taxes and enjoy an
upscale craft cocktail that will blow your mind. Whichever you
choose, this fantastic area of town will leave you coming back for
more.
Cochran and Ruzzine are brokers with the Sperry Van Ness Gold
Dust Commercial Associates.
Greg Ruzzine (left) and Ian Cochran are working with clients
eager to do business in Midtown.
The 777 building, the former Maytan Music Center, is getting a
multimillion dollar
makeover. A before shot shows the building prior to remodeling,
along with
recent construction photo and an artists rendering of the
completed project.
Courtesy photos
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-
Northern Nevada Real Estate Journal | Monday, July 27, 2015 |
www.nnbw.com | 7
Commercial developer sees the big picturePanattonis Doug Roberts
continues to make his mark on the regions commercial real estate
landscape
NNBW Staff
He has developed and built some of the most significant office
and commercial real estate projects in this market. He has
developed more than 3.5 million square feet here in northern Nevada
for tenants such as Jarden, Trex, Petco, Urban Outfitters, Bally
Technologies and many more. His company is completing work on the
new Petco distribution center this month and has broken ground on
the largest speculative project ever to be built in northern
Nevada. The first phase of that project, called North Valley
Commerce Center, is a 707,000-square-foot cross dock building
scheduled for completion around the end of the year. Named one of
the Developers of the Decade at the recent 10th annual Summit
Awards, Doug Roberts of Panattoni Development has seen the region
grow and transform. Now, at the forefront of northern Nevadas
economic recovery, he is making his mark on the landscape of our
community more than ever. I believe companies will continue to look
to Nevada as California continues to have a challenging business
environment and we are developing property both in response and
anticipation of that need, said Roberts. We have a comparatively
lower cost of living, low taxes and business-friendly regulations.
In addition to California companies looking to move east, companies
throughout the country see Nevada, and specifically Reno, an ideal
location from where they can distribute their goods throughout the
western United States. Those factors have made this region
attractive to real estate investors as well. A partner with
Panattoni with more than 25 years of experience in real estate,
Roberts oversees development in Reno, Las Vegas and Arizona for the
company. With more than 3.2 million square feet of new development
planned this year in Nevada alone, Roberts makes it his business to
understand the intricacies and hopefully the direction of each
market. The northern Nevada market has seen extreme highs and
extreme lows in the past decade, said Roberts. We are seeing values
of existing properties rise and new projects start to come out of
the ground, which is a great change of pace from recent years. The
North Valley Commerce Center is a prime example.
The hope is that the growth is sustainable and that what we are
doing contributes to the economic recovery of northern Nevada, said
Roberts. We have all experienced the alternative during the
economic downtown in 2008 so we are focused on sound fundamentals.
Roberts is responsible for all aspects of the development of
office, industrial and retail projects as well as the supervision
of staff and personnel. He actively oversees development managers,
during preliminary and ongoing stages of the budget and throughout
the construction process. He takes pride in taking on each projects
unique set of challenges to create an end product that is
cost-effective, functional and attractive to tenants and
prospective buyers. It is rewarding to find a location with great
potential and turn it into a product that fits the needs of a
company, said Roberts. I enjoy building lasting structures that
will serve their current and future users well over time. Roberts
calls northern Nevada home, where he lives with his wife and
children. His investment in the community does not stop at land. He
is active in several key professional organizations in an ongoing
effort to advance his skills and the industry as a whole. Roberts
is the current president of the Northern Nevada Chapter of the
National Association of Industrial and Office Properties (NAIOP)
and an associate member of the Society of Industrial and Office
Realtors (SIOR), Nevada Development Authority (NDA), the Economic
Development Authority
of Western Nevada (EDAWN), Commercial Real Estate Women (CREW)
and Certified Commercial Investment Member (CCIM). In addition to
his professional affiliations, Roberts is a current member and the
past president of the Reno Central Rotary and a founding board
member of the Keaton Raphael Memorial (now known as the Northern
Nevada Childrens Cancer Foundation), an organization assisting
families with children battling pediatric cancer. My wife and I saw
a need for programs and services for families in the fight here in
Northern Nevada through some friends who were
affected, said Roberts. We have been working along with the rest
of the board on serving those needs for over a decade now. If
market conditions continue to improve as we all hope they do, you
can expect to see more and more activity from Panattoni as well as
other developers, said Roberts. I am looking forward to the
advancement and growth we are anticipating in the years to
come.
Officials break ground in October on the new Petco Distribution
Center
in North Valleys, constructed by Panattoni Development.
Courtesy Panattoni Development
Doug Roberts, a partner with Panattoni Development, speaks to
guests at the Petco groundbreaking. Courtesy Panattoni
Development
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Apartments continued from p1
Preliminary data indicate only 634 units sold in the second
quarter. One significant sale in the second quarter was the 184
Caviata complex at Kiley Ranch in Sparks. Oakmont Properties
Caviata LLC., of San Rafael, Calif., purchased the complex in May
for $33.8 million. With numerous transactions in the works, the
pace is about to pick up substantially. Two large communities are
headed for auction in the coming months: The Village at Iron
Blossom, with 404 units, and Viscaya Hilltop Apartments, with 318
units. The sales of three additional complexes 300 units, 200 units
and 256 units are pending. A good chunk are pending for the third
quarter, Noursoultanova said. Up in the air for the near term are
Lakeridge East and Lakeridge West. Both have been embroiled in
separate foreclosure processes for a few years, Rowley said. Thank
God were running out and the country is running out of foreclosed
properties, he said. The asking price for multifamily properties is
trending up in the region. In May, the median price per unit for
multifamily properties was $75,016.66 in the Reno metro area,
according to loopnet.com. Thats up 6.7 percent compared to three
months prior and up 41.6 percent compared to May 2014. The pace of
construction is also gaining ground.
Several projects are under construction and others are in
various stages of planning, with a potential increase of 3,558
units to be added to the market in the next couple years. Other
developments in the very early stages could put that at 6,200 or
more. It takes about two years to move a project from the planning
stage to completion, Noursoultanova said. Residents began moving
into the Edge Water at Virginia Lake, a Silverwing development, in
July. Completion of all 288 apartments and condominiums is expected
by this time next year. Kromer Investments expects the 288 units in
the Villas at Keystone Canyon Phase I to be completed by the end
the year. Even as that project finishes, Kromer is planning Phase
II with 120 additional units. Entering Phase II of construction are
the Bungalows at Sky Vista with completion of the 158 standalone
bungalows expected in October The Village at Arrow Creek, a Ryder
Home development in South Reno, will bring online another 120 units
in January 2016. We have a staggered delivery, of apartment units
going online, Noursoultanova said. Theyre not all at once hitting
the market, she said. Were fortunate its happening in a disciplined
market. Currently, planned apartment complexes are focused on
A-Class, which provide a higher return on investments for
contractors.
Hopefully a group of developers will focus on workforce
apartments, Rowley said. Apartments in the area that are 15-20
years old and still considered Class-A because of location and
maintenance will have a hard time keeping up with new Class-A
apartments, he said. Multifamily development activity in Sparks is
especially active. Expect an estimated 1,238 new units to hit the
market in the next couple years. Thats not surprising when you
consider that Sparks is the city closest to the Tahoe Reno
Industrial Complex where thousands of new jobs are expected to open
up when the new Tesla gigafactory plant, Panasonic
offices, Switch fiberoptic complex, and others open for business
beginning next year. LandCap Development plans to redevelop the
former Silver Club/Bourbon Square casino/hotel on Victorian Square
in Sparks into a 98-unit apartment building. The company also is in
the early planning stage for a 920-unit complex adjacent to the
Legends Outlet in Sparks and to convert a parking garage at the
Sparks Marina into 220 apartments. Its an exciting time to be in
northern Nevada, Rowley said. Unlike the last big boom, which was a
one-trick pony (due to the limited economic diversity), this one
seems to be very broad based.
8 | Northern Nevada Real Estate Journal | Monday, July 27, 2015
| www.nnbw.com
The Tesla effect on the investment market in the regionBy Tom
Fennell
The national and regional news of Telsa and other viable
companies relocating to the area is creating an interesting market
dynamic for commercial investment property in northern Nevada.
Prior to the Tesla announcement and during the throes of a nasty
recession, we saw discounted pricing and higher capitalization
rates than we are seeing today. Is this created by the Tesla
effect, a healthy economy, or a combination of both? During the
recession, Reno and other tertiary markets similar to our
demographic were viewed as risky markets to invest in real estate
in comparison to major markets. As is typical during economic
recovery, the major metropolitan areas around the country were the
first markets to see recovery in leasing, development and
investment activity. Nationwide investment volume was up almost 40
percent in the first quarter of 2015. But as the national economy
has come back, the ability to achieve desired returns has gotten
more competitive in major metropolitan areas and real estate prices
have increased dramatically. This has caused national or regional
developers, investors, and landlords to look at smaller markets for
higher yield opportunities. Another factor in the increased
investment demand has been historically low interest rates for an
extended period of time. The Fed has maintained a stance of keeping
interest rates low, which helps investors and users of commercial
real estate leverage to a higher price point in their search for
their real estate purchases as a result of lower borrowing
costs.
Analysts have kept saying interest rates are going to go up for
years, however after the latest Federal Reserve meeting, the Fed
said they may not have any increases until December and even then a
potential increase will be incremental. Combining the Tesla
announcement with uptick in our local economy, and we now have
serious interest on investment demand, such as in the following
categories.
Apartments and industrial Investment in commercial real estate
was certainly not at a standstill during the recession in northern
Nevada. There were active investors in our market that were able to
acquire assets well below replacement value. The most sought after
asset classes for investment in our region have been apartments and
industrial. Those two sectors were the better performers during the
recession as compared to office, retail and land. Apartments and
industrial have long had the lowest vacancies in our area and have
been the first assets to see cap rates compressing. Apartments have
also had the most flexible lending terms as banking institutions
saw the multifamily market as one of the safest. This ties back
into low borrowing costs and has added to the competition of the
apartment market. Low interest rates, more favorable terms from
banks as compared with other sectors and good indicators (low
vacancy, high demand) has brought a highly competitive
mentality
into our apartment market as compared with some of the other
asset classes. Can apartments in our market still be a good
investment? Absolutely! But finding quality product and desired
yields is, and will continue to be, very challenging. Industrial is
seeing some of the same trends with institutional buyers completing
large transactions in the
market. Another factor in our industrial market is that the
majority of market is controlled by institutional owners that have
a tendency to pursue large dispositions, so the number of true
investment transactions for a one off product can be limited. In
comparison, apartment transactions involve more regional and local
owner/operators.
Office and retail The cap rate compression we are seeing in the
apartment and industrial markets has caused investors to consider
other asset classes such as office and retail. Demand for
investment deals also causes investors looking for quality, low
risk deals to adjust their expectations of returns, furthering
interest into other areas. As prices go up, yields go down and as
product is limited in traditionally sought after assets classes and
areas, investors are increasingly looking more at value added
scenarios than in previous years in our region, which is driving
renewed interest in the office and retail markets. According to the
2015 Pension Real Estate Association Investment Survey, 77
percent of investors who responded said they expect to buy value
added investments in the U.S. this year. What is the downside in
all of this investment demand and growth? Due to reported increases
in future job growth and the Tesla effect, owners have a perceived
value in their real estate holdings that is far exceeding normal
valuations. Rental rates are a key component in valuing and
underwriting commercial real estate, and we havent seen the
economics of our commercial rents change enough to warrant the
inflated expectations of value. From an investor standpoint, if you
are buying an asset at a low cap rate, and you dont achieve the
rent growth you are projecting, the results can be punitive.
Financial underwriting adds to the investment stress with difficult
terms and problematic appraisals not matching up with anticipated
property values. We certainly have seen speculation in real
property increase, and out-of-the area investors are now looking at
northern Nevada as a viable region to place capital. However, the
perceived rent growth, job growth and property economics have not
yet changed to warrant some of the asking prices that we are now
seeing in the marketplace. Though there is still plenty of product
and repositioning in the market, realistic growth and value
expectations will be the key in successfully disposing and/or
acquiring an investment property. Over the next several years, we
anticipate that the abundance of job creation will significantly
impact our area, which will fuel new development in all real estate
classes.
Tom Fennell is a principal and broker with Dickson Commercial
Group.
The Village at Iron Blossom is up for auction, one of several
large apartment complexes expected to change hands in the third
quarter of 2015.
Sally Roberts/NNBW
Tom Fennell
-
Northern Nevada Real Estate Journal | Monday, July 27, 2015 |
www.nnbw.com | 9
Office Market continued from p1
Kietzke Lane is usually local developers wanting to sell to a
local market, he said of the tenant mix, which are mostly
Nevada-based companies. In South Meadows, youre selling to a
national market, he said of leasing activity. The area, which is
becoming a tech hub by virtue of new tenants like Grand Rounds,
attracts business owners and office workers who want an open plan,
meaning fewer cubes and walls. With downtown Reno catering to many
law firms, accounting offices and financial services businesses,
the standard office set up will continue. While they want the
latest in technology upgrades, These are people who need privacy
for their clients, so an open office concept doesnt fit the bill.
In terms of Class A buildings, there is a race for the best space,
tilting the scales in favor of landlords when leases come up for
renewal. Many transacted fire sale leases at the depths of the
recession five years ago. In a recovering economy, that no longer
applies. So look for growth in rents.
Landlords are going to be demanding more money, which will shift
many tenants to more affordable Class B and C buildings, he
predicted. Reno is an interesting market, said Ruffin. Office space
utilization is highly dependent on the strength of the local
economy. Its a regional office not a national headquarters kind of
market. Still, the mood is more upbeat in the commercial real
estate circles. Sales will be strong if you can find investment
properties, said Ruffin.
A big factor? Once Tesla was announced, attitudes changed and
Reno changed, he observed. Teslas arrival will not only impact the
commercial real estate market, but the residential market as well,
said Molyneaux, talking about the potential housing needs of its
employees and those gearing up to meet the demand For the rest of
2015, Ruffiin expects reasonable activity in the Reno-Sparks office
markets. Itll be an average year, he said. Even though economic
fundamentals are much improved, Were still coming from a low bar,
he added, referring to the toll wrought by the Great Recession.
Food continued from p1
Foodservice, Costco, Wal-Mart, Raleys, SaveMart, Safeway,
Harrahs and served at many Nevada and California restaurants.
Founder/CEO Fran Pritchard came from California to Gardnerville 22
years ago when her husband retired from IBM. Shed spent years as a
manager in the commercial food service industry, where she became
known for her fresh salsa, which customers told her was killer,
hence the company name. In 1993, frustrated with working at a local
mini mart, she decided to test the market with a fresh salsa
product she made in a local restaurant kitchen after hours. After
getting positive feedback from local restaurants and delis,
Pritchard decided she had the recipe for a viable business and she
remembers, thats when the learning process began. One of the
biggest hurdles she faced was finding a new home with room to
expand when her plan to sell the company failed several years ago
after shed sold off all her equipment and gave up her space to
another food manufacturer. Due to all the new government
regulations, which she says are choking small food businesses, by
going
way overboard with no common sense, she had to locate a
4,000-square-foot property that would meet her expansion needs,
accommodate her eight employees and invest in all the necessary
improvements, including a new walkin refrigeration system, a roll
up door for her trucks, separating out the production area from
inventory and shipping, and adding new drains for sinks and toilets
at roughly $3000 per drain. Now being subjected to third-party
audits for food safety, Pritchard is required to document
everything that takes place in the building and must keep the doors
locked due to a new bioterrorism act. A benefit of being in
business in a small community is the synergy that exists with other
food manufacturers. We work to help each other out and promote each
others business, Pritchard said. A relationship with Val and Sal
Gray of Italian Hearts Pasta Sauces in Gardnerville is a prime
example. When they met several years ago, the Grays were preparing
to build a production facility/cafe in mid-town Reno. After losing
jobs in the recession, friends suggested and supported creating a
business around the traditional sauce that was a mainstay of
their regular dinner parties. Funding was a major hurdle.
Undeterred, the Reno couple began building the company in a shared
Sparks commercial kitchen, which didnt pan out. Then they explored
the idea of working with a co-packer. But we wanted what we served
to our friends and family to be what we sell commercially, Gray
said, and notes the co-packing option meant giving up the quality
control which would guarantee their high standards of taste and
nutrition The Grays found great compatibility with Prichards
business model and values, sharing many of the same fresh
ingredients and production standards, especially around
cleanliness. They were able to take over the turnkey production
facility two years
ago, which continues to be a better business solution, even with
the regular commute. Although they sell their three Italian Hearts
brand sauces through four Whole Foods stores and other groceries,
including Raleys, the couple also has an Etsy storefront and
markets directly to customers at local events and from their
facility at 1425 Industrial Way Suite C in Gardnerville. People can
come here and get their whole dinner, she says. That includes her
homemade heart ravioli.
Renown picked up the Reno Tahoe Tech Center building for $11
million. Courtesy photo
Tim Ruffin Melissa Molyneaux
The staff bottles original recipe Killer Salsa for sale at
Costco.
Sal and Val Gray are seen slow cooking a batch of sauce.
Photos by Susan Ditz
-
10 | Northern Nevada Real Estate Journal | Monday, July 27, 2015
| www.nnbw.com
In her own words: ArchCrests Erin Krueger-Seipel
Name/Title/Company: Erin Krueger-Seipel, Marketing and Office
Manager for ArchCrest Commercial Partners where I am also a part of
the Krueger Land Team. Number of years with company: 3Number of
years in the profession: 17Education: BS in Business Administration
with a minor in marketing from the University of Nevada, RenoLast
book read: Yikes, its been awhile. Does Pinterest count? Favorite
movie: Too many to name. Im a sucker for any romantic comedy.
Favorite musical group or genre: I love music and all genres so its
hard to name my one favorite. But if I must, it would be the Dave
Matthews Band.Spouse, kids or pets: Husband and just two
four-legged children for now a Labradoodle and a 20-pound cat.
Northern Nevada Business Weekly: Tell us about your company and
the duties of your position:Erin Krueger-Seipel: ArchCrest
Commercial Partners is an independent commercial real estate
brokerage firm offering an array of commercial real estate services
in northern Nevada. I wear a lot of hats for ArchCrest. Primarily,
I work alongside my mentor and father as part of the Krueger Land
Team where we specialize in the sale of residential land. I also
serve as the office and marketing manager where I oversee all
marketing efforts and day-to-day operational activities. NNBW: How
did you get into this profession?Krueger-Seipel: When I was just
16, my dad hired me to help around his office, doing tasks such as
filing, entering business cards and typing letters. He was with
Grubb & Ellis-NCG at the time and I was soon hired on as the
marketing assistant. I worked my way up from there, adding on
responsibilities and changing job titles over the years. I grew up
in this business and I fell in love with it early on, which is why
Im still here 17 years later. NNBW: Tell us what it was like to
start your own business? How did you go about the process of
getting started?Krueger-Seipel: I was very fortunate to be a part
of the creation of ArchCrest Commercial Partners. I helped create
the companys brand, marketing plan and operational processes. It
was a fun learning experience.NNBW: What is one of your biggest
professional accomplishments?Krueger-Seipel: In my job capacity,
its very easy to get stuck behind the desk. So a few years ago, I
decided to step outside my comfort zone and get more involved in
the real estate community by joining CREW (commercial real estate
women). This organization really brought me out of my shell. I was
voted onto the board of directors and then honored with the
opportunity to serve as the northern Nevada chapter president. This
is definitely one of the biggest accomplishments of my career.
NNBW: What do you enjoy most about working in your
field?Krueger-Seipel: I love that after 17 years in this business,
I am continually faced with new challenges. I also enjoy being a
part of this markets growth and development. Its truly rewarding to
see a piece of dirt I helped market become a new development. NNBW:
Whats the most challenging part about your job?Krueger-Seipel:
While I love all the hats I wear at the office because it keeps the
job interesting, it is very challenging to maintain a high level of
quality when you have to juggle them all at once. NNBW: What advice
would give anyone who wants to get in your
profession?Krueger-Seipel: Going above and beyond what is expected
really pays off in the long run! NNBW: What was your first
job?Krueger-Seipel: I worked in a nursery at our neighborhood
church where I fed, changed diapers and tried to keep happy several
infants at one time. NNBW: What are your hobbies? How do you spend
your time away from work?Krueger-Seipel: Ive had intentions of
taking up serious hobbies in past, like photography, but never
actually havenot yet at least. I like spending my free time with
family (I have a pretty awesome one). I absolutely love being an
auntie and spend every chance I get with my nieces and nephew. I
use them as my excuse to see the latest cartoon in the theatre, go
to awesome places like Jump Man Jump, color in coloring books and
really just be a kid again. NNBW: Do you have a favorite vacation
spot?Krueger-Seipel: I used to love a Mexican beach vacation, but
unfortunately my last vacation, which was my wedding and honeymoon,
resulted in a hurricane and becoming a refugee of Mexico. Im now
staying close to home these days and enjoying beautiful Lake Tahoe
or the California Coast. NNBW: If you had one moment in time to
cherish for the rest of your life either professionally or
personally what would it be and why?Krueger-Seipel: Marrying my
husband because he truly brings the best out of me and life is so
much better with him in it. NNBW: Last concert or sporting event
attended?Krueger-Seipel: I recently saw Ed Sheeran perform at the
Greek Amphitheatre in Berkeley. He is such a talented artist and it
was an amazing experience to watch him perform live. His show
definitely made my top 5! NNBW: What did you dream of becoming as a
kid?Krueger-Seipel: It might sounds crazy but I actually dreamt of
working in an office as a kid! I used to set up a desk by the home
phone and would wait for it to ring so I could take messages (it
would never ring) and my favorite Christmas present from Santa was
personalized stationery and a briefcase. I would beg my dad to let
me go to his office so I could file paperwork and buzz all the
different cubicles from his phone. Funny how filing is now my most
dreaded task!NNBW: If you had enough money to retire right now,
would you? Why or why not?Krueger-Seipel: I honestly think I would
be bored not working, though this is my pre-children self speaking.
If I had enough money to retire right now, I would, but I would
stay in the game by investing in real estate and managing my own
assets. NNBW: Why did you choose a career in northern Nevada? What
do you like about living/working here?Krueger-Seipel: My parents
tried ruining my life by moving me to Reno after my freshman year
of high school. Little did I know then that it would be the best
thing they ever did for me and I would grow to love northern Nevada
and never want to leave. I was given an early opportunity for a
prosperous career that I decided to stick with, so I attended
college at the University of Nevada, Reno so I could continue
working and growing in this profession. I love the four distinct
seasons that we have here and that we go from 0 to 100 degrees over
the course of a year. I love the people in this community and the
opportunities northern Nevada has given me and my family.
Museums rooftop renovation embraces the Nevada skyBy Sally
[email protected]
A new rooftop look is under construction for the Nevada Museum
of Art Work is underway to make the original, under utilized,
outdoor space into a more hospitable and elegant year-round venue.
More than a year ago, museum officials took a close look at
underleveraged revenue opportunities, museum Executive Director
David Walker said at a recent event to announce the project. We
have doubled our operating budget in the last five years, Walker
said. As we continue to develop new programs, it costs more. The
fourth-floor rooftop was high on the list of underachieving spaces.
When the museum was constructed in 2003, the rooftop was created as
a unique venue with panoramic views of the city and Sierra.
However, thanks to northern Nevadas summer winds and inclement
winter weather, it remains empty much of the year. Architect Will
Bruder, who designed the original building, was charged with
developing concepts to solve the weather challenges of the rooftop
while also creating a dramatic architectural addition to the museum
and downtown Reno. Renamed the Fred W. Smith Penthouse, the $5.5
million re-creation of the rooftop is expected to be completed in
early 2016 and include an enlarged, windowed inside space plus
protected outdoor area. The 4,800-square-foot Nightingale Sky Room
features retractable floor-to-ceiling glass walls that provide a
sheltered interior space but can be opened up in good weather. Up
to 250 people can be seated for formal dinners, or 397 for
concerts, parties, lectures, conferences, workshops, childrens
programs and other special events. Noted Reno-area restaurateur
Mark Estee is helping design a state-of-the-art banquet kitchen.
Outside the Sky Room will be the Stacie Mathewson Sky Plaza with
nearly 5,000 square feet of patio space protected by glass parapets
that block the Nevada winds but not the views. Opening the Sky Room
to encompass the Sky Plaza can increase dinner seating to 500
people. Clark/Sullivan Construction was called in as the contractor
for the project. The Sparks-based construction company has been the
general contractor for every major capital development at the
museum since its inception in 2003. They know us, know our
business, Walker said. Clark/Sullivan also did the work on the
recently remodeled museums E.L. Cord Museum School, which Walker
pointed to as an example of boosting the revenue stream for the
museum with an existing program. The
school, previously hidden inside the museum, presents a variety
of art classes for all ages. Tuition increased 35 percent over the
last five months, tied directly to being more visible. If people
dont know where you are, people dont come, Walker said. By
increasing the usefulness of the rooftop venue, the museum expects
to substantially increase its revenue flow from special events,
including weddings. We do 10 weddings per year now (at the museum),
Walker said. Well be doing about 30 after the Sky Room is
completed. The Sky Room is named and designed with homage to the
historic Mapes Hotels elegant top floor Sky Room. The Mapes in
downtown Reno was imploded in 2000. People have fond memories
attached to the Sky Room, Walker said. We felt we could become the
Sky Room for the 21st century. Currently, most special events in
Reno are held in the citys hotel/casinos, he said. Thats fine. Were
not going to take that away from them. But a lot of people, a lot
of organizations would like a more inspirational location. We will
have the most unique space in northern Nevada. Steven Nightingale,
with the Nightingale Family Foundation Trust, which donated the
seed money to get the project started, helped develop the rooftop
project from conception. The theme present in every conversation I
had with David (Walker) and Will (Bruder) was, what is a museum?
and what does a museum do? A museum collects beauty and safeguards
it and offers it to the community. The museum, is conceived as a
place we can gather as a community and have the best chance to do
our best work together, Nightingale said. Funding for the Sky Room
project came from generous support from individuals and
foundations, most of which have had a long relationship with the
museum. For all intents and purposes, fundraising is over (for the
rooftop project), Walker said.
By increasing the usefulnessof the rooftop
venue, the museum expects to substantially
increase itsrevenue flow from special
events, including weddings.
-
Northern Nevada Real Estate Journal | Monday, July 27, 2015 |
www.nnbw.com | 11
South Meadows recovery increases speedBy Sally
[email protected]
The South Meadows office market is again trotting along after
being tripped up in the recession. Through the first half of the
year, our net absorption (of office space) is larger than all of
last year, said Matt Grimes of CBRE Office Services. In the last
few months, Grand Rounds healthcare, BlackRidge Technology and
Coupa office software developer, snagged some of the last large
Class-A spaces with freeway visibility, all on Professional Circle
between Double R Boulevard and Interstate 580. Fronting the
freeway, there are limited options, Grimes said. The best available
spaces are leasing out. On the northern edge of South Meadows, The
Nevada Department of Wildlife is moving in to 6980 Sierra Center
Parkway space, long empty after Microsoft and Intuit moved out.
Office building sales are also moving forward. In May, Renown
Health purchased the 63,200 square foot building at 10315
Professional Circle. Even though it was considered a distressed
sale because of low vacancy rates, its close proximity to Renowns
South Meadows campus, plus having data center technologies in
place, made it a prime office acquisition for the areas largest
medical provider.
Renown paid $11.7 million, or more than $184 per square foot.
Nev Dex Properties purchased 10345 Professional Circle for $9.5
million earlier this year. The 64,300 square foot building houses
offices for Grand Rounds, Aerotek, PC-Doctor, Inc., and Lennar.
The office market in the South Meadows has been impressive this
year, Grimes said, but there are still long-term vacancies that
need to be filled. Second quarter numbers are still being compiled
but are expected to show continued improvement from the depth of
the recession when South Meadows office vacancies climbed to 28.1
percent. First quarter numbers were hurt, in large part, to the
market return of
the former WMS Gaming Building on Trademark Drive and the
complex at 10315 Professional Circle. The office vacancy rate
climbed to 18.6 percent compared to 15.6 percent in the fourth
quarter of 2014. With the Professional Circle building now part of
Renown, and the move-ins by Grand Round, BlackRidge and Coupa,
expect to see second quarter vacancies back in line with the
overall trends.
Renown Health recently purchased the 63,000 square foot building
in the Reno Tahoe Tech Center for $11.7. Located at 10315
Professional Circle, its located just south of its South Meadows
campus.
Sally Roberts/NNBW
Fidelitone gets new fulfillment center in Sparks
Bank backs new downtown Reno health clinic
NNBW Staff
Fidelitone Logistics Inc. closed a deal in June to lease a
95,200-square-foot distribution space in Sparks for an order
fulfillment center. Its expected to be operational by August. The
Sparks location at 1135 Southern Way, the companys second in the
area, will support Fidelitones order fulfillment clients requiring
direct-to-consumer fulfillment to consumers in the western half of
the United States. They also operate a center with more than 50,000
square feet on East Parr Boulevard in Reno. Fidelitone,
headquartered in Wauconda, Ill., provides third-party logistics and
supply chain solutions for Fortune 100 companies and start-ups in
the United States and internationally. Fidelitone was founded in
1929 as a phonograph needle manufacturer. Today it processes
thousands of orders from small parts to large palletized products
daily and ships to 120 countries.
The company was recognized by Inbound Logistics as a Top 100
third-party logistics provider in 2013 and 2014. Fidelitone has
been featured in the Crains Chicago Business exclusive ranking of
the largest privately-held companies for five years running, and
was named to Inc.s 500 | 5000 list of the nations fastest-growing
private companies in 2014. Representing the landlord, Morrison
Street Capital, LLC, in the Sparks-lease transaction were
commercial specialists J. Michael Hoeck, Dave Simonsen, Michael
Nevis, and Steve Kucera of NAI Alliance Industrial Properties
Group.
Morrison serves as the investment manager of a series of
discretionary real estate funds based in Portland, Ore. Working on
behalf of Fidelitone was Bryan Gardner of Reno Property Management.
In other commercial real estate news, the building at the Tahoe
Reno Industrial Center housing the Zulily distribution site changed
hands this week. CBRE Global Investors has brokered a deal on
behalf of an unnamed U.S. client to acquire the property. Zulily,
Inc. has a long-term lease for the 707,010-square-foot
warehouse/distribution site at 3200 USA Parkway. Zulily, an
e-commerce business, sells clothing, toys and home products
catering to mothers and children. Developed on a build-to-suit
basis in 2014, the property is among the newest deliveries to the
Reno-Sparks MSA and includes high-quality construction and
state-of-the-art building features that serve the tenants ecommerce
requirements and future growth needs. Industrial is a very
in-demand asset class at this time, and we were able to acquire a
newly built, high-quality asset that should deliver a secure income
stream to our client, in excess of yields that would be achieved on
a similar industrial product, said Mike Everly, Portfolio Manager,
CBRE Global Investors. TRIC is a master-planned industrial park
located 12 miles east of Reno in McCarran on Interstate 80, a major
national transportation thoroughfare.
NNBW Staff
U.S. Bank is investing $5.6 million in the construction of a
new, nearly $20 million medical facility for the Northern Nevada
HOPES clinic that will care for an additional 400 patients a month,
including for the first time, primary pediatric care. The clinic,
which is operating out of a modular building at 580 W. Fifth St.,
is under construction now and is slated to be completed by
December. The new 37,500-square-foot building
will span three stories and be named for its benefactor The
Stacie Mathewson Community Wellness Center. The new HOPES clinic
will be Renos first integrated care facility, where patients will
have access to a wide range of medical and wellness services in one
location, said HOPES CEO Sharon Chamberlain. It will become a
medical home for 10,000 patients a year, the vast majority of whom
are low-income or homeless individuals. A medical home
is akin to a traditional physicians office where all non-urgent
care begins and is coordinated. HOPES performed a needs assessment
of its area downtown and found that there is a tremendous shortage
of medical providers (3,952 patients for every provider). Northern
Nevada Hopes is vital to so many in the greater Reno area who
struggle to access comprehensive and quality health care, said
Maria Bustria-Glickman, vice president of U.S. Bancorp
Community Development Corporation. U.S. Bancorp Community
Development Corporation invested $5.6 million in equity that comes
from New Markets Tax Credits. That $5.6 million was provided to
community development organizations that loaned the money to the
clinic at below-market rates that help close a financing gap. The
clinic expansion will generate 105 construction jobs, 43 new
permanent positions and retain 52 existing jobs.
In the last few months, Grand
Rounds healthcare, BlackRidgeTechnology and Coupa
office softwaredeveloper, snagged
some of the lastlarge Class-A
spaces with freewayvisibility, all on
Professional Circlebetween Double R
Boulevard andInterstate 580.
Industrial is a very in-demand asset class at this time, and
were able to acquire a newly built,high-quality asset that should
deliver a secure income stream to our client, in excess of
yields
that would be achieved on a similar industrial product.
Mike Everly, Portfolio Manager, CBRE Global Investors
-
12 | Northern Nevada Real Estate Journal | Monday, July 27, 2015
| www.nnbw.com
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