1st
Quarter
2014
Industrial Market Report
New Home Sales and Permits
Market Highlights
PAGE 1
The Reno/Sparks industrial market ended the first quarter of 2014 with a vacancy rate that continued its downward trend to 9.4% with gross
absorption totaling a positive 682,355 square feet. If we consider the unbelievable absorption numbers in the third and fourth quarters of 2013,
the market has conveyed more promise of stabilization in the first quarter of 2014. While asking lease rates and sale prices were the same as the
previous quarter, or slightly higher in some cases, these are positive indicators that our market is showing overall economic stability.
1st Quarter Statistics
Deliveries & Construction
During the first quarter of 2014, a 524,800 square-foot facility was delivered at 600 USA Parkway and is now 52% occupied. The largest projects
underway at the end of first quarter were 3200 USA Parkway, a 707,010 square-foot building with 100% of its space pre-leased and Logisticenter
395 Building B, a 624,000-square foot facility that is 0% pre-leased.
Vacancy
At the end of the first quarter of 2014, the overall vacancy rate in the Reno/Sparks area, including the flex/freestanding/mid-bay/manufacturing
and distribution product types, decreased from 9.5% at the end of 2013 to 9.4%. There was little change in the vacancy rate due to the new
transactions vs. vacated spaces in the first quarter of 2014.
Lease Rates
The average quoted asking rental rate within the Reno/Sparks flex sector was $0.72 per square foot per month. The average quoted asking rental
rate within the Reno/Sparks warehouse sector was $0.33 per square foot per month.
Absorption
Gross Absorption for the overall Reno/Sparks industrial market totaled a positive 682,355 square feet in the first quarter of 2014. Some notable tenants
relocating into new space or signing lease renewals included: 104,574-square-feet at 240 Stanford Way in Sparks, Genco totaling 173,700 square-feet
in two different sub-markets (Sparks & North Valleys), Ceva Logistics U.S., Inc. totaling 153,013 square-feet and AmeriSource
Bergen totaling 102,500 square feet in South Reno. Companies that have decided to sign new leases or stay in their original
1Q14
spaces affect the vacancy rate but are not considered in the absorption numbers.
Results
absorption

vacancy

lease rates

transactions

Source: Costar
Employment
In March of 2014, the unemployment rate was reported to be 8.5%, however the rate dropped to 8% in April 2014. This
is great news for prospects of Nevada moving forward out of the “Great Recession”. According to William D. Anderson
of the Nevada DETR; “Year to date, there are 44,000 more jobs than there were in the same period in 2013. The private
sector is averaging a gain of 42,700, or a 4.3 percent increase. About 55% of the jobs that were lost during the downturn
have been recovered in total.
Market Overview
In the first quarter of 2014, there was still a limited amount of available space on the market, mainly state of the art
freestanding buildings and distribution product (big box). We will see continued upward pressure on vacancies until the
first building at Logisticenter 395 is completed. We expect the second building (A), totaling 399,500 square feet, to get
underway sometime this year depending on the demand and the vacancies that are expected to occur in the following
quarters of 2014. Some of the new vacancies that will occur in 2014 are Zulily.com, SanMar Corporation, and Randa
Logistics. The currently known large build-to-suit activity is a positive indicator that the Reno/Sparks area is continuing
to attract large 3PL’s, distributors and manufacturers. We anticipate an additional 1.6 million square feet of large buildto-suit product in the North Valleys.
With the multi-state obsession regarding the announcement of Tesla’s Gigafactory (lithium battery plant) reported to be
upwards of 10,000,000 square-feet and employing up to 6,500 people. This coupled with the Apple campus could be the
beginning of a never seen before growth cycle in the Reno/Sparks area as well as Northern Nevada.
ArchCrest Commercial Partners - Reno Industrial Group
5470 Reno Corporate Drive, Reno, NV 89511 | Ph: (775) 852-9800 | www.archcrestnv.com/rig
1st Quarter 2014
Industrial Market Report
PAGE 2
Total Industrial Market Statistics
Existing Inventory
Vacancy
1Q14
# Blds
Total RBA
Direct SF
Total SF
Vac %
YTD Gross
Absorption
YTD Deliveries
Under Const. SF
Airport Industrial
207
8,736,774
1,127,718
1,143,334
13.1%
31,738
0
0
North Valleys Industrial
167
13,750,825
791,538
954,038
6.9%
213,782
0
624,000
Market
Central Reno Industrial
161
Fernley Industrial
38
South Reno Industrial
Sparks Industrial
Storey County Industrial
West Reno Industrial
Totals
147
622
55
38
1,435
Sales Transactions
2,562,696
107,499
4,251,479
107,499
267,775
9,315,094
267,775
853,973
27,591,167
1,194,769
117,375
7.9%
132,626
6,825,462
(64,350)
10.9%
654,877
132,626
75,728,353
(3,240)
9.2%
3,010,429
654,877
44,012
6.3%
853,973
2,889,456
8,325,549
4.2%
260,600
11.1%
7,124,551
2,640
9.4%
602,557
0
0
0
0
0
0
524,800
0
524,800
0
0
707,010
0
1,331,010
Property Address
Submarket
Square Feet
Price/Sq. Ft.
Buyer
Seller
250 Arletta Street
West Reno Ind
10,240
$62.01
Sierra Crew, LLC
Colligan C J Trust
300-340 Kresge Lane
Sparks Ind
18,518
$32.40
Jkn LLC 300 Kresge Series
Big Julie, Inc
415 E. 4th Street
Central Ind
527 Coney Island Drive
2335 Market Street
8,000
Sparks Ind
335-543 Vista Boulevard
$56.25
6,951
Central Ind
$106.46
21,583
Sparks Ind
T2m3 Marietta Investments, LLC
$133.21
8,565
Lease Transactions
Navprit S & Manpreet Bajwa
Chester Real Estate, LLC
$55.00
Tin River, LLC
Property Address
Submarket
Square Feet
Tenant
4855 Longely Lane
Airport Industrial
57,840
Custom Ink
Golden Valley Distribution Center Bldg 5
North Valleys Industrial
39,800
Radians Nevada
4900 Ampere Drive
Spanish Springs Corporate Park
655 Spice Island Drive
Airport Industrial
Sparks Industrial
Sparks Industrial
51,136
30,900
30,672
contact RIG for all your industrial needs
just look for the
Kyle Eigenman
ARCH
Senior Vice President
[email protected]
Todd Collins
Senior Associate
[email protected]
775.852.9800
w w w. a r c h c r e s t n v. c o m
ArchCrest Commercial Partners
5470 Reno Corporate Drive, Reno, NV 89511 | Ph: (775) 852-9800
Prototype Concepts
SKS Bottle
Trek
1Q14
Pamela R. Hay Trust
Temen N G Living 1990 Trust
Rocks Consign Furniture, LLC
Vista Business Park, LLC
1Q14