In all, 1.13 million square feet of new Class A industrial space will be split among five buildings ranging in size from 147,000 square feet to 317,000 square feet.
RENO, Nev. — The wheels of commerce have all but ground to a halt across Nevada, but that's not stopping two local developers from kicking off a large industrial and retail project this summer.
Reno Land Inc. and Dermody Properties recently announced plans to construct 1.13 million square feet of industrial space and 35,000 square feet of retail at The Park at McCarran.
Last fall, Reno Land Inc. President and CEO Chip Bowlby purchased 104 acres east of Mill Street and McCarran Boulevard from the University of Nevada, Reno in an $18 million deal.
The Park at McCarran encompasses 60 acres, with the rest of the land devoted to water retention and floodplain mitigation. The main entrance for the project will be from Mill Street, with an additional entrance off Capital Boulevard at the south end of the site.
The 7.5-acre retail component will serve as the gateway to the industrial portion of the project and likely will include a mix of convenience stores, a gas station, bank, car wash, fitness center, and drive-through eateries, Bowlby says. There's already been strong interest in leasing retail space at The Park at McCarran from many high-rated credit tenants, he adds.
The 1.13 million square feet of new Class A industrial space will be split among five buildings ranging in size from 147,000 square feet to 317,000 square feet; however, they could be divisible to smaller sizes depending on user interest. The first two buildings are scheduled to break ground this July with delivery in the second quarter of 2021.
While it's an unlikely time to begin a development of this size, Bowlby is bullish on The Park at McCarran, mostly due to its location.
“It's probably the last large piece of infill property outside of the North Valleys for an industrial and retail master planned development,” Bowlby said in an early April interview. “It has its challenges, but it's so well located with its proximity to Interstate 80 and the Southeast Connector that it will really serve the city well.
“This is ground zero,” he adds. “Companies looking at Reno for manufacturing, distribution or anything, if you had to pick a spot this is where you want to be — it's the wow factor. Even with what's going on with the coronavirus, this is going to be a winner.
“We have a lot of interest from the industrial and retail (sectors) since it's such a prime location, and we are keeping our fingers on the pulse of the industrial, retail and financial markets and analyzing them as well.”
Bowlby says the development partners spent between $300,000 and $500,000 performing due diligence on the property. Much of that work centered on soils conditions — the site has long been part of the university's Main Station Farm — and addressing flood mitigation issues.
It's no secret the site sits in perhaps the largest floodplain in the Truckee Meadows, and that much of the land in that area was inundated during the flood of 1997 and other major flood events.
Grade for all the buildings will sit above the floodplain, says John Ramous, Nevada partner with Reno-based Dermody Properties. And the majority of the parcel purchased by Reno Land will remain undeveloped in order to incorporate water retention areas and address other floodplain issues.
“We feel comfortable with how we designed it,” Ramous says. “We assumed the worst and planned for it. We will have to bring on offsite material to raise grade. It's not insignificant, but it's the right thing to do and it's how we have to address (the flooding) issue.”
Bowlby says there are approximately 37 acres on site where they can take fill to raise grade within the development footprint.
“We have analyzed many engineering and development methods to ensure the project complies with local zoning and flood control measures,” he says.
And since most of the easily developed industrial sites already have vanished around the Truckee Meadows, the additional grading costs are actually minor compared to other potential industrial development sites, Ramous adds.
Reno Land's core business strengths lie in developing retail, multi- and single-family residential developments, Bowlby says, which is why it made sense to partner with an experienced industrial developer.
Reno Land interviewed several regional developers but ultimately partnered with Dermody Properties, which constructed many of the adjacent industrial buildings west of McCarran Boulevard over the past few decades.
“We felt that aligning ourselves with the best industrial developer in the area would be the key to success; the fit is perfect,” Bowlby says. “Dermody has an extreme and educated interest in the property, and they are the experts in industrial (development).”
Ramous says Dermody has already fielded a proposal from a tenant seeking 50,000 square feet of space and there's yet to be a single spade of dirt turned at the site.
Class A industrial space in the 50,000-square-foot range and smaller has been scant in recent years, and The Park at McCarran could accommodate a variety of users, he adds.
“A lot of growth on the industrial side has really catered to larger tenants,” Ramous says. “Unfortunately, given increased land and construction prices, initial demand and risk, a lot of smaller to mid-sized companies have been looked over. This project, based on its location and the value of the land, could accommodate larger tenants in the back buildings and the front buildings could cater to smaller tenants who have been challenged to find opportunities (for new space).
“We think there will be strong demand for that (size range), and I wish we had even more to offer because there will be continued demand for it.”
Buildings will be constructed with 32-foot to 36-foot clear heights to accommodate e-commerce users and last-mile distributors. Each building also will have 4,000 amps of power, which could prove attractive to a variety of users in the manufacturing sector as well, Ramous says.
United Construction will be the general contractor on the project. Other companies with local offices that are involved with The Park at McCarran include CFA Engineers & Surveyors, RHP Mechanical, Jensen Electric Company, Desert Fire Protection, BJG Architecture & Engineering, L&L Plumbing and Heating, Krater Consulting Group, DC Engineering, Headway Transportation, and Cardno Engineering.
CBRE's Eric Bennet, Dan Buhrmann and Greg Shutt will handle industrial leasing, while Shawn Smith will handle retail leasing.
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