The $25.6 million sale of a major industrial property at Tahoe Reno Industrial Center reflects a vote of confidence in the northern Nevada market, says a broker who helped put the deal together.
KTR Capital Partners Ltd. of New York City acquired the 566,885-square-foot building from Eagle Valley Industrial Center LLC, which is owned by McShane Development Company, a suburban Chicago company, and MetLife Real Estate Investments.
The building at 555 Milan Drive on the east side of Tahoe Reno Industrial Center is completely occupied by a Diapers.com distribution center.
Completed in mid-2008, just months before the economy tanked, the building sat vacant for more than two years before Diapers.com moved in.
But a tenant who'd signed a lease on the entire building created an attractive proposition for KTR Capital Partners.
"This was a compelling opportunity to acquire a high-quality, stabilized asset at a discount to replacement cost," said Philip Prassas, senior vice president of investments for KTR.
The distribution center includes 32-foot clear heights and 148 dock-high doors. It's on a 28-acre site.
An upside kicker: A pad is ready next door to the existing distribution center to build a second building, perhaps as large as 900,000 square feet.
The site, Prassas says, positions KTR to compete for build-to-suit transactions with companies that are looking to develop regional distribution facilities.
Along with cost advantages that it gets from the Eagle Valley Industrial Center site, Prassas said KTR likes the central location, inexpensive labor and pro-business environment of northern Nevada.
He noted that Web fulfillment businesses in particular have been drawn to Reno.
Along with Diapers.com, Toys 'R' Us operates a big e-fulfillment center within a stone's throw of the Eagle Valley Industrial Center property.
Eric Bennett, Daniel Buhrmann and Gordon Zack of CBRE Inc. in Reno represented both the buyer and the seller.
Bennett said the transaction is noteworthy partly because it reflects growing interest in the Reno market among major institutional investors. The purchase is KTR's first in northern Nevada.
"They are looking to strengthen their West Coast industrial presence," he said.
KTR manages a series of private equity funds that target industrial properties, largely in the logistics sector.