E-Commerce, Advanced Manufacturing Attract Capital to Reno
Industrial sales and leasing in the Reno-Sparks area remains one of the best performing sectors in the marketplace, just as it did in 2017. With a record vacancy percentage below 4 percent, combined with new buildings being occupied upon completion, the strong demand for new and existing industrial product is a welcome normality from previous years.
The North Valley’s submarket has been the dominant center point for speculative development. It is currently the fastest-growing submarket in Reno, as nearly 50 percent of the transactions containing more than 50,000 square feet were concentrated in this submarket.
This is primarily attributed to the abundance of skilled labor in the area and proximity to Interstate 80. Developers continue their hunt for buildable land in the area, though the availability of readily developable parcels is dwindling.
Driven by consumer shifts toward internet goods, along with burgeoning advanced manufacturing, capital from institutional and regional investors alike have entered Reno’s industrial market. This has led to the industrial market posting the largest volume and most competitive assets. Last year’s investment volume was up 90 percent year over year, with a 14 percent increase in the total number of sales.
The most recent eye-opener was Blockchains’ acquisition of a shocking 64,000 acres at the Tahoe Reno Industrial Center (TRI) in January. The acquisition concluded the balance of the available land at TRI (104,000 acres in total) from the original developer.
Blockchains has yet to announce specific details on their plans for development, but it is speculated they will be looking to build a large corporate campus in a portion of the park near Google’s site.
Tesla, Switch and Apple are continuing to expand in the area, with new phases expecting to come online throughout 2018, keeping the spotlight on Northern Nevada as a tech hub.
— By Joel Fountain and Baker Krukow, industrial specialists, Dickson Commercial Group. This article first appeared in the April 2018 issue of Western Real Estate Business magazine.