Firms Taking Advantage of Market Conditions
While the economic downturn with it’s escalating foreclosure rates, rising fuel costs, weak US dollar and increasing unemployment figures are putting many companies expansion plans on hold, we are noticing that others seem to be rising to seize the market opportunities that the Reno-Sparks area is offering.
The poster child for the area’s industrial real estate overbuilt condition is at the TRIC industrial park on Interstate 80 east of Reno in the large warehouse sizes. Recently the area was reporting in excess of 20% vacancy, but more recently deals have started happening.
In the Union Property Capital project at 2777 USA Parkway, F. Rogers Insulation is just opening their new 100,000 sf distribution facility to serve their western operations. Carole Miller of Miller Industrial Properties, LLC brokered the deal for F. Rogers, with Gordon Zack and Eric Bennett representing UPC. Carole had well over a dozen potential locations for the new warehouse to show her client but the TRIC location offered the best value; “ UPC has put an excellent product on the market for the distribution user and made us an offer that represents a superior value for my client, the overall package is outstanding”. Carole further notes that the project is brand new, filled with ‘green’, cost saving features and was offered at lease rates that are extremely attractive.
In the same property, Midwest Air Technologies has taken a 120,000 sf space as well. This deal was done just prior to the F Rogers deal and together this property is about 40% filled at this time. MAT is a supplier to Home Depot and Lowes for fencing materials. They also have divisions that handle automotive, home décor and gardening accessories.
Next door at 2555 USA Parkway, Prologis has had a 600,000+sf facility standing vacant for quite some time. Well, that has now changed. Kuehn and Nagle will be taking over 200,000 sf of space in the facility, expanding and consolidating their Reno operations in the new location. In addition, we understand an automotive parts distributor will be locating a new 200,000+ sf facility in the property as well. These deals will put this property to over 60% occupied.
Miller Industrial Properties is currently working with a firm that has had their plans to build a new west coast manufacturing facility on the back burner now for quite a few years but now feel that the timing is right due to the excellent construction pricing available due to the slowing in new construction. We have also scheduled a first visit to the area for another firm looking for a new west coast manufacturing facility as well. In chatting with other brokers, we are generally hearing the word ‘Uptick’ in activity. While new visits don’t always translate directly to new deals, a this point any good news is welcome. And this uptick is certainly good news.
So we cross our fingers and hope that the ‘wait and see’ attitude might be losing a little ground to the excellent buying opportunities the area has to offer currently. Because we certainly know these opportunities will not last forever and those with the foresight and the ability will reap the benefits of these great deals long after this depresseed economy is just a bad memory.