Big new industrial projects might begin filling quickly
October 23, 2006
In an exceptionally tight market for industrial space, the addition of more than 1.6 million square feet of space in northern Nevada ordinarily would provide some breathing room.
But developers said last week that they’re close to signing deals with tenants for good chunks of two big buildings under way at Tahoe Reno Industrial Center.
A spokeswoman for Denver-based ProLogis said the company is seeing strong interest in a 601,000-square-foot distribution center it’s developing at Tahoe Reno Industrial Center.
The company can’t yet announce any leases on the building, the spokeswoman said.
Trammell Crow Co., meanwhile, is within days of nailing down leases on about 600,000 square feet of the 1 million square feet of industrial distribution space it’s developing with ING Corp. at Tahoe Reno Industrial Center.
“Signed contracts are expected any day now,” said Matt Riecken, a senior vice president for the company.
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United Construction Co. of Reno is the general contractor of the ProLogis project, which was designed by the architectural firm of Blakely Johnson & Ghusn, also of Reno.
Brandon Page, a ProLogis vice president who oversees its Reno-area operations, said the vacancy rate in the company’s northern Nevada space is below 6 percent. ProLogis owns or operates about 4 million square feet in the market.
“The industrial market here has experienced significant improvement over the past few years,” Page said.
The Trammell Crow and ProLogis projects at Tahoe Reno Industrial Center about 10 miles east of Sparks are among the largest speculative development projects in the history of northern Nevada.
To put the size of the new buildings in perspective, the Meadowood Mall is about 1 million square feet.
The construction comes as new and expanding industrial and distribution companies continue to soak up space in the area at a record-setting pace.
For the first nine months of this year, the brokerage firm of Alliance Commercial estimates that tenants have absorbed more than 3.5 million square feet of space in industrial buildings. That exceeds the total for any full year let alone a nine-month period in the history of the region.
The vacancy rate in industrial buildings was estimated by Alliance to stand at 5.49 percent on Sept. 30, up a notch from the 4.84 percent figure three months earlier.
A big factor in the higher vacancy rate was the closure of a 181,000-square-foot manufacturing facility in Fernley by ARE Inc., a manufacturer of pickup truck caps.