2nd
Quarter
2015
Industrial Market Report
New Home Sales and Permits
PAGE 1
Progressive and Steady Growth
The Northern Nevada Industrial market showed over a million square feet of gross absorption in the second quarter of 2015,
while the vacancy rate landed at 8.5%. With a healthy amount of vacant mid-bay and distribution space as well as the speculative
development underway there will be numerous options for large users to lease space in the Northern Nevada Industrial Market.
As the market expands and with Tesla underway, along with other users, the Reno/Sparks Industrial market is progressively and
steadily moving forward.
2nd Quarter Statistics
Deliveries & Construction
To date, the Reno/Sparks industrial sector has delivered 1,420,000 square feet of new industrial space. This mainly consisted
of Amazon.com (624,000 SF) and the PETCO (750,000 SF) distribution buildings. Currently there is 926,000 square feet under
construction in the North Valleys Industrial market and over 5.5 million square feet in Storey County (TRIC) mainly consisting of
Tesla’s Giga Factory.
Vacancy & Absorption
As of the end of Q2 2015, the Reno/Sparks industrial sectors vacancy rate increased to 8.5%, up from Q1 2015, which ended at
8.1%. The vacancy rate was derived from approximately 77,265,393 square feet of Flex Office/Warehouse, Freestanding, Mid-bay,
Manufacturing and Distribution product types for sale and/or lease within the Reno/Sparks metro area. Gross absorption numbers
were positive, totaling 1,874,787 square feet and net absorption was positive despite close to 400,000 square feet of move outs, the
largest being Trex totaling 115,200 square feet.
Sale Prices & Lease Rates
The asking sales prices for industrial free standing buildings have somewhat stabilized ranging from the mid to upper $50’s psf
for Class C buildings, high $60’s psf for Class B buildings, and high $90’s psf for Class A buildings. The average quoted market
asking lease rate for Flex Office/Warehouse product increased to $0.60 psf per month on the low end in the Sparks Industrial area,
$0.76 psf per month in the Central submarket and up to $0.85 psf per month on the high end of the market in West Reno and South
Meadows. The average quoted market asking lease rate for Warehouse product including manufacturing and
distribution ranged from $0.31 psf per month for the older product typically offering 5% office space, 28’
2Q15
clear height and standard .33/1000 sprinkler systems to $0.36 psf per month for newer manufacturing and
distribution buildings that offer 5%-10% office space, 32’-36’ clear height and ESFR sprinkler systems. The
Results
medium size requirement of 25,000 square feet to 99,000 square feet showed a slower amount of activity.
The activity on the smaller spaces 2,500 square feet to 24,000square feet remained steady while the large
gross absorption spaces of 100,000 square feet plus continued on a positive course. Landlords are beginning to pulling back on
reduced rents, free rent and tenant improvement concessions. As we continue to see the Northern Nevada
Industrial market grow, we see vacancy rates staying at a healthy level, companies continuing to absorb
space, and rental rates stabilizing.

vacancy

lease rates

construction

Source: Costar
Employment
This quarter saw Nevada’s statewide unemployment fall to 6.9%, the lowest it has been since July 2008
according to the Nevada Department of Employment Training and Rehabilitation (DETR). “Job levels have
risen in five of the six months during the first half of the year and are trending about 40,000 higher than
a year ago,” said Governor Brian Sandoval. With annual growth of 4% relative to 2013, Nevada’s private
sector job growth ranks second in the nation according to Bill Anderson, chief economist for the (DTRE).
Additionally, the labor force has seen a recent increase, with more than 20,000 new individuals beginning to
search for work.
Market Overview
Looking forward to the 3rd quarter of 2015 we see an opportunity for future development of freestanding
buildings, due to the extreme lack of inventory and high demand. With the existing inventory of mid-bay
and distribution product as well the speculative development currently in the market we will see lease
rates continue to stabilize, however freestanding building sale prices will continue to increase due to lack of
inventory. We will continue to see more speculative development in the months to come as more companies
from out of state moving into Northern Nevada, either to service Tesla and its counterparts,
or to take advantage of what Northern Nevada has to offer.
ArchCrest Commercial Partners - Reno Industrial Group
5470 Reno Corporate Drive, Reno, NV 89511 | Ph: (775) 852-9800 | www.archcrestnv.com/rig
2nd Quarter 2015
Industrial Market Report
PAGE 2
Total Industrial Market Statistics
Existing Inventory
Market
Vacancy
YTD Deliveries
Under Const. SF
10.8%
0
0
4.3%
1,392,000
926,000
# Blds
Total RBA
Direct SF
Total SF
Vac %
Airport Industrial
210
8,723,056
944,630
944,630
North Valleys Industrial
167
15,083,205
589,042
589,042
Central Reno Industrial
Fernley Industrial
South Reno Industrial
Sparks Industrial
Storey County Industrial
West Reno Industrial
162
39
146
623
55
39
2,560,018
4,158,520
9,386,329
27,453,812
8,693,184
1,207,269
Notable Sales Transactions
99,819
795,235
582,909
2,630,240
521,361
2,000
99,819
822,235
582,909
2,538,320
1,021,361
2,000
2Q15
3.9%
19.1%
6.2%
9.6%
6.6%
0.2%
0
0
0
606,000
1,231,810
0
0
0
0
0
5,500,000
0
Property Address
Submarket
Price
Buyer
3200 USA Parkway
Storey County
$41,750,000 ($59.05/sf)
CBRE Investors
1690 Industrial Way
Sparks
$2,500,000 ($161.29/sf)
Dean Lauren Properties, LLC
10875 Sage Point Court
955-1007 Greg Street
695 Edison Way
250 Arletta Street
4980 Joule Street
North Valleys
Sparks
Airport
Central Reno
$1,650,000 ($44.29/sf)
$1,050,000 ($183.82/sf)
$925,000 ($30.86/sf)
Prologis-Exchange
GS Properties, LLC
CVC Concrete
Arletta, LLC
Notable Lease Transactions
$1,982,000 ($56.14/sf)
Property Address
Submarket
Square Feet
Tenant
770 Red Rock Rd
North Valleys
770,650
Petco
905-1485 Southern Way
Sparks
92,500
Fidelitone
475 Lillard Way
665-667 Spice Island Drive
4900 Ampere Drive
750 S Rock Blvd
Central Reno
$8,825,800 ($46.99/sf)
Sparks
Sparks
Airport
Sparks
106,720
79,200
63,960
63,808
contact RIG for all your industrial needs
just look for the
Kyle Eigenman
Senior Vice President
keigenman@archcrestnv.com
ARCH
Christopher Capurro
Senior Associate
ccapurro@archcrestnv.com
775.852.9800
w w w. a r c h c r e s t n v. c o m
ArchCrest Commercial Partners - Reno Industrial Group
5470 Reno Corporate Drive, Reno, NV 89511 | Ph: (775) 852-9800
2Q15
Peppermill Corporation
OHL
Patogonia
Brownells Inc
Vyper
2Q15