Northern Nevada Real Estate

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Volume 2,
Issue 2

COMMERCIAL | INDUSTRIAL | RETAIL | LAND | OFFICE

Monday, July 27, 2015 | www.nnbw.com

Medical players added to

froth in Q2 offi ce market
By Steve Sinovic
ssinovic@nnbw.biz
The end of the second
quarter of the year means
its time to take the
measure of Renos office
market. Checking in with
Tim Ruffin and Melissa
Molyneaux, the office team
at Colliers International,
the duo shared a couple
of takeaways as they
calculated the level of
leasing activity and sales.
One big dealmaker:
Renown Health. Reno had
just the right prescription
that the healthcare
provider sought in a new
home and additional office
space. The operator
of hospitals and other
healthcare facilities
purchased the Reno Tahoe
Tech Center at 10315
Professional Circle Drive.

Ruffin said Renown

picked up the South
Meadows property for
$11 million, which he said
was a notable transaction
for the quarter. He said
the 63,000-squarefoot building has been
considered distressed by
virtue of its low vacancy.
The freeway frontage
is outstanding, said
Ruffin, who said Renown
plans to make the building
a strong focal point of
its Hometown Health
insurance arm.
In addition to acquiring
the property in South
Reno, Renown has also
taken over 16,000 square
feet of space at 50 W.
Liberty. Ruffin said Renown
plans to office some of
its administrative staff
downtown.

Not to be outdone,
St. Marys Regional
Medical Center will take
on the former Scolaris
grocery store and is in
the market to co-lease
space with UNR for the
medical schools residency
program, Molyneaux said.
Another healthcare
business called AeroCare
leased the old AT&T data
center at 1450 Vassar
Street, which will be a
call center. The nearly
30,000-square-foot
building has significant
up-to-date IT infrastructure
capacity and has been
well-maintained, said
Molyneaux, although it had
a few dated and quirky
features, such as old
telephone booths in the
lobby. The new tenant
plans some improvements
before taking occupancy.

The increases left

the overall office vacancy
rate flat for the quarter at
15.7 percent, which is just
a nudge down from the
previous quarters 16.2
percent, according to the
Colliers team.
The slow, steady
upward pace of leasing
will continue in the third
quarter, said Ruffin.
Two things: the nicest
Class A buildings are filling
up and the market for
the most part still cant
justify new (office building)
construction as in past
years.
One exception is the
Kietzke Lane corridor,
where Ruffin said some
significant construction
development is underway.
continued on page 9

Apartments on track as hot investments

By Sally Roberts
sroberts@nnbw.biz
The sale and opening
of multifamily properties
slowed to a brisk trot after
performing at a gallop
early in the year.
The market pace is
expected to pick up speed
during the remainder of the
year, but new apartment
construction could trail far
behind the need.

Floyd Rowley, senior

vice president, investments
of the Johnson Group,
sees the current period of
normalcy as the drawback
of ocean water before
the arrival of a tsunami
in terms of job growth
crashing into housing
availability.
Unless we build a ton
of houses, Im not sure
where everyone will live,
Rowley said.

During the recession,

C-class apartments were
40-50 percent full. Now
they are 80-90 percent
full.
Even with the potential
of 6,200 new apartments
entering the market in the
next couple years, it may
not be enough.
At the Northern
Nevada Housing Summit in
early July, Mike Kazmierski,
president and CEO of the

Economic Development
Authority of Western
Nevada, predicted the
region could expect
52,400 new jobs and
a population growth of
64,700, conservatively.
We have a housing
crisis, Kazmierski told
the gathering hosted by
Governor Sandoval. We
should be building, not
200 homes, but more like
2,000 homes.
For investors,
prospects for multifamily
complexes in the Reno/
Sparks metro area look like
winning bets.
Reno is definitely
on the map among
investors, said Aiman
Noursoultanova, senior
vice president investment
properties at CBRE.
Thats really exciting
for us in the business.
In the first quarter of
2015, 939 multifamily units
changed hands, according
to figures released by
CBRE.
continued on page 8

Plans are underway by LandCap Development to transform the hotel portion of the
former Silver Club/Bourbon Square casino on Victorian Square in Sparks into a
98-unit apartment building. Sally Roberts/NNBW

Carson Valley
food businesses
fi nd right fi t in
industrial park
By Susan Ditz
The desire for more handmade,
locally sourced, healthy and
environmentally friendly food
products has resulted in a growing
opportunity for culinary entrepreneurs
in northern Nevada.
Small companies are springing
up all over the region. However,
artisan food developers who want
to live and work in the Carson Valley
face a big challenge finding the right
space to create their distinctive
small-batch products.
Health regulations can require
daunting and expensive property
upgrades to ensure food safety.
For most the solution is leasing
industrial space where the necessary
improvements such as walk-in
refrigeration and special drainage,
are already in place. But that kind of
property isnt always easy to find at a
price point a food entrepreneur can
afford.
Industrial parks in Minden and
Gardnerville are currently home
to everything from churches to
thrift stores to auto repair shops,
manufacturing and distribution
centers. Its an appealing area,
especially for smaller mom and pop
shops, because the quality of life is
so great in the region, according to
local agent Dick Silvera, who has run
his commercial real estate business
in Gardnerville for 20 years.
But we are running out of
industrial space, he says. Following
the recession, rents have not come
back to where they were, so no new
space is being built, and we are in
dire need, especially for buildings of
20,000 square feet or larger.
Therefore, due to limited options,
small food production operations
in the area he says only make up,
about 2-3 percent of the total
tenant population. Even though the
average 55 cents per square foot
price tag (plus CAMs of 10-12 cents)
is higher than comparable space in
the Reno area where there is more
inventory, he gets regular inquiries
from food entrepreneurs who want
to get established in the Minden/
Gardnerville area.
One of the real local success
stories is Killer Salsa in Gardnerville,
which received the Entrepreneur
of the year Pioneer Award in
2013 from the Northern Nevada
Development Authority and offers
a line of nine fresh, cooked and
dehydrated products now available
online at www.killersalsa.com, through
continued on page 9

2 | Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com

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Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com | 3

Retail markets are moving in the right direction

By Anne Knowles
Shopping season is in full swing
again in northern Nevada.
Economic indicators for the areas
retail market are all moving in the right
direction, continuing a positive trend
that started last year.
Vacancy rates, for example, are
down while net absorption is up and
lease rates are finally on the rise after
stagnating for years.
Vacancy rates are down to 13.5
percent overall, the best theyve been
since 2009, before things started really
crashing, said Roxanne Stevenson,
senior vice president, Colliers
International in Reno. For the first
time in a long time asking rents have
increased, to about $1.27 per square
foot. And net absorption was about
62,000 square feet in the first half of the
year.
Another commercial broker in
Reno, CBRE, has slightly different
numbers. According to Shawn Smith,
vice president, vacancy rates are
down to 14.3 percent, net absorption
in the first half was 81,886 square feet,
including 11,000 square feet of new
construction at the Legends in Sparks,
and the average lease rate stands at
$1.22 triple net. Also, fewer than 20
vacant big box stores remain on the
market.
Both agree, though, the news is
good.
Reno is the buzz right now. We are
back on the radar screen, said Smith.
National chains and franchises are both
looking.
That includes a major sporting
goods retailer expected to lease 50,000
square feet in the Meadowood Mall,
which has been delayed by building
height restrictions in the area due

to its proximity to the Reno Tahoe

International Airport, according to Smith.
A Sleep Number, the national
mattress store, is being built on the
northeast corner of South Virginia Street
and Neil Road, in the lot where Joes
Diner recently stood. A second space in
the building is currently being marketed,
Stevenson said.
A few national retailers have been
touring the area and looking at options,
she said. A couple are brands within
brands, a new name to our market but
under the umbrella of another brand.
Bernie Carter said he has a letter of
intent from a national retailer new to the
Reno market for the 15,000 square-foot,
first floor of the converted downtown
post office. The local developer expects
the retailer to open its doors sometime
in 2016.
Some shops in the historic buildings
basement are already or soon will open
for business, including a florist, barber
shop and chocolatier.
Four of five of Carters Midtown
retail projects are fully leased, including

two restaurants, Two Chicks and Sp,

a new yoga center and a bed and bath
supply store. Carter said he has two,
1,200 square-foot spaces open in the
popular Midtown location.
Another Midtown project is being
rebranded. Blake Smiths multi-use
project initially known as The Cove is
now called 1401 Midtown, for the South
Virginia Street address of the Heritage
Bank building that forms the core of the
plan.
Smith is turning the 9,000 squarefoot building into a 21,000 square-foot
mix of residential, office and retail
space. About 3,000 square feet will be
apartments, with eight single-family
homes added in the back.
About 12,400 square feet of 17,200
square feet of commercial space is
already leased to three future tenants
and another 2,000 square feet has a
letter of intent. Smith is building out
about 2,900 square feet on spec for a
restaurant.
Smith also recently purchased
a 3,300 square-foot building with 20

parking spaces at Lake and Second

streets, near the Reno Aces baseball
stadium, which he plans to lease to
retailers and a restaurant.
Carter and Smith are well-known
local developers, but much of the recent
action in the retail market has come
from outside investors, another good
sign.
CBREs Smith says 80 percent
of recent retail property purchases,
such as the Scolaris building in the
Southwest Pavilion, were made by
outside investors.
Most are from California where
product inventory and cap rates
the ratio of net operating income to
property asset value are tight.
For instance, Jim Kaplan, an Incline
Village resident who previously invested
back east, made his foray into the Reno
market when he recently purchased
The Crossing shopping mall at the busy,
southwest corner of South Virginia
Street and Neil Road.
Since then, he has leased to three
new tenants Ocean Spa and Nails,
Custom Apparel Ink and Bear Bums, the
citys only cloth diaper service.
Kaplan is in the process of upgrading
the sites landscaping, signage and
building facades, and has three more,
750 square-foot spaces for lease.
Our occupancy rate has gone up
from 70 percent to 90 percent, said
Kaplan, who is manager of The Crossing
SC LLC, which owns the property. Its a
great location, a hidden gem thats not
been utilized to its fullest potential.

The Summit in south Reno at Mount Rose

Highway and South Virginia Street has recently
added new tenants, including lulumon athletica
and Miguels Mexican restaurant.
Photo courtesy The Summit.

Thank you, Petco, for allowing us

to serve you as you continue to
serve pet owners across the West.
We appreciate working with you on your newest distribution center.
980 Sandhill Road, Suite 100 | Reno, NV 89521
775-829-6112
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4 | Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com

Spec construction of office space slated for Kietzke corridor

By Justin Noin
The northern Nevada office
market has not seen any new
development exceeding 10,000
square feet in nearly a decade.
What has been built has been
build-to-suit product with tenants
already in place before dirt is moved.
Speculative construction in the office
market has been halted for some
time. In fact, northern Nevada has not
seen a spec office project since 2008.
Between 2006 and 2010, the
market experienced a steady increase
in vacancy rates. From 2010 through
most of 2012, lease rates continued to
drop.
Developers could not construct
a building and lease it for the costs
of development. The result was that
tenants were limited to pre-existing
buildings, though rents were lower.
While vacancy rates began to drop
in 2010, lease rates did not see an
increase until nearly the end of 2012.
Now that we are past one of the
most significant economic downturns
in our history, lease rates have begun
to approach the level to warrant new
construction. Tenants are going to
begin to see more options as demand
continues to grow and ground
up projects are now feasible for
developers and tenants alike.
As always, some submarkets in
the area are stronger than others and

spec building is beginning to pencil for

property owners and investors. The
Kietzke corridor has continued to be
one of the most dominant submarkets
for office users. This area continues to
have lower vacancy rates over time
in good market conditions and not so
good market conditions.
In fact, plans are moving forward
on the first speculative office product
to be built in northern Nevada in more
than seven years in the Mountain View
Corporate Center.
The center is located past the
roundabout at the south end of
Kietzke Lane. The site has freeway
visibility, the space to accommodate
needed parking and the surrounding

buildings (all Class A) are some of the

best quality in the market.
McKenzie Properties will
break ground late summer on a
40,000-square-foot speculative office
building on the 5.5-acre parcel next
to the City National Bank building.
This area will remain one of the most
desirable submarkets in town and we
believe there will be significant tenant
demand in Mountain View Corporate.
The new Class A building is
scheduled to be complete in July of
2016. It will be four stories with a view
of Evans Creek and the surrounding
mountains. Finishes will reflect the
same high quality as the surrounding
product.

Not only can we expect to see

more and more additions to the
inventory in the office market, it is truly
a market signifier to see speculative
development begin. Confidence in
the northern Nevada commercial real
estate market is higher than it has
been in a decade and the result will
be more and more movement and
construction in 2015 and 2016.
Justin Noin is a property asset
manager with McKenzie Properties,
a third-generation, northern Nevada
developer and construction company.
For more information, visit www.
mckenzieproperties.com.

McKenzie Properties plans development

on this lot at the south end of Kietzke.
Courtesy McKenzie Properties

A simple lease renewal may not be that simple

By Tom MIller
For tenants of industrial and
commercial property, a lease
renewal is almost a certainty at one
point or another. From a tenants
perspective, if the space is working
well and the landlord and leasing
agent are making it easy, whats the
harm in simply signing the renewal
and getting back to business?
Thats certainly one way of
handling things and it may even
have its virtues. Signing the renewal
gets it off your desk so you can
focus on your business. But there
are a few critical aspects to the
simple lease renewal that are worth
considering first.
To begin, be very clear about
who is working for whom in this
process. The landlord has specific
goals for his real estate asset and
achieving a certain yield hurdle for
his investment is certainly one of
them. The landlord strives to secure
both the highest rental rate and
high annual rent increases while
minimizing his outlay of resources to
achieve those goals.
The tenants interests are all on
the opposite side of the negotiating
sheet the lowest possible rent,
the lowest annual rent increases
and possible improvements to the
space at landlord cost. You can try
to negotiate these points with the
landlords agent on your own, but
understand that the landlords agent
and the landlord both spend all day,

every day dealing with

lease transactions
in the local market.
How much lease
negotiating experience
do you as the tenant
bring to the table?
This is precisely
where the benefit of
an agent who solely
represents your
interests becomes
clear. Even if you know
and like the landlords
agent, never forget
whom he or she
represents and
remember that it isnt you. One
agent can legally represent both
the tenant and the landlord with the
execution of a special document
that acknowledges both parties
are aware of and agreeable to this
unique arrangement. Its similar
to having one lawyer representing
both the prosecution and the
defense in the same case. Consider
how effective one agent can be
trying to serve two clients with
opposing interests.
Perspective can also be
valuable in this process. Dont
simply view it as a renewal. The
prudent tenant considers it an
opportunity for renegotiation, or at
the very least, a chance to review
the details of the agreement.
From this standpoint, bringing in a
specialist is a sensible move. Whats
more, by delegating this important

item to a competent
experienced
professional, youre
free to run your
business, secure
in the knowledge
that the process
will progress rapidly
with your interests
skillfully represented.
Your agent
will ask questions
and be very clear
about your short,
Tom Miller mid and long-term
business models
with attention to
growth, potential downsizing or any
other special needs now and in the
future. Your agent will perform a
detailed lease review and produce
a written abstract outlining the
critical business points in the lease
and all amendments. The agent
will review previously negotiated
terms that may now be dated,
as well as anything that would
benefit from updates, revisions
or eliminations. For example, hell
look over any tenant improvement
costs amortized into the initial
lease rate that may need adjusting
or eliminating. Just a focus to this
detail alone can have a significant
impact, so as a tenant, its wise to
honestly consider whether or not
one has the ability to conduct a
review like this solo.
Another important and
obvious consideration is lease

rates. An agent can track a

tenants current rate in comparison
to market rents over the same
time period. As the market has
experienced wild pricing swings in
the last six years, current input on
todays rates is a necessity during
renegotiations. An agent can supply
statistical facts, not approximations,
of relevant comparable
transactions, including all the fine
points that bring the comparable
lease rates into sharp focus.
Market facts should also be
brought into the equation. An agent
can produce specific submarket
vacancy and absorption numbers
that are clear and accurate
indicators of what a given property
type, size and submarket is
experiencing today. These data
points are essential for setting a
realistic price/terms hurdle to shoot
for on a renewal.
An agent also brings a credibility
factor to the renewal process.
When an agent represents the
tenant, the landlord understands
that the renewal will need to be
a market renewal to gain support
from your agent. In short, an agent
provides a free, professional and
timely service from which any tenant
will benefit even for a simple
lease renewal.
Tom Miller is the president of
Miller Industrial Properties, one of
northern Nevadas leading industrial
real estate brokerage firms.

Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com | 5

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6 | Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com

Despite hurdles, retail growth underway in Midtown

By Ian Cochran, CCIM
and Greg Ruzzine
If youve spent any time in the
Reno-Sparks area in the past two
years, you may be familiar with
the Midtown District just south of
downtown Reno between California
Avenue and Plumb Lane. Even more
noticeable are the changes that the
district has seen over the past few
years, consistently improving and
expanding. We have had the good
fortune to be part of this amazing
growth of this area over the past
several years.
At the inception of the Midtown
District, we clearly remember several
skeptics questioning whether this
idea would really take ight. With
developers such as Bernie Carter,
Dark Horse Investments and Thomas
Y. Johnson of TY Johnson Investments
leading the charge, the transformation
of the Midtown District into the
hippest new area of town has been
exponential.
With a healthier local economy and
a clear vision for the Midtown District,
tenants and investors alike are ocking
to the area eager to find their place in
this ourishing market. For tenants,
there are several excellent options
such as the 777 Center Street project.
Many may identify the 777
Center Street project as the former
Maytan Music Center. To some,
this building was a Reno landmark.
Nearly everyone who has grown up
in the area may have gotten their first
trumpet, trombone, piano or musical
instrument from the Maytan Music
Center.
Owner Thomas Y. Johnson has
taken special notice to this fact and
has worked hard to preserve some of
the history of the Maytan family during
a complete renovation.

On the north side of the building,

you will find a mural of children playing
various instruments which Johnson is
currently restoring as a remembrance
of the Maytan legacy for all to enjoy.
Aside from this mural, you wont
recognize this property due to its
modern new design and elegant
lighting. With the building nearing
completion, Johnson has worked to
secure several restaurants and retail
tenants and is eager to see the project
come alive.
From an investors perspective,
there arent nearly as many options as
there are for tenants looking to root
themselves in the Midtown area.
Local Sperry Van Ness ofces are
currently working with several investors
who are eager to acquire property in
the area.
Regardless of property type or
location, slim available inventory and
the lack of sellers have made the
barrier to entry difficult. Due to the
age of the properties located in the
Midtown District, most have been
owned for several generations by the
same entity and have produced a
steady income stream for their owners.
The challenge has been attempting
to match the owners perceived
value to the current market value
of the property. In addition, there
are a handful of retail properties in
Midtown that would need significant
renovations in order to compete with
new developments such as Sticks at
Midtown or 777 Center Street.
When you combine the rehab
costs with the owners perceived value
of the property, more times than not,
the hurdle is too great for either party
to overcome. We foresee the value
of these properties lining up at some
point in the near future.
Dark Horse Investments is one of
the newest investors in the market,

Greg Ruzzine (left) and Ian Cochran are working with clients eager to do business in Midtown.

securing two properties in Midtown.

One of their projects they will soon
begin renovations on is 1039 S. Virginia
Street. They strive for a product similar
to Sticks at Midtown and 777 Center
Street with a mix of retail and ofce
tenants.
One of their rst tasks will be
stripping the white paint from the
front of the building and restoring the
original brick. Upon its completion, this
project will surely be a highly desired
property for tenants looking to be in
the Midtown area.
Average asking lease rates in the
Midtown District for existing second
generation retail spaces are between
$1 and $1.25 per square foot based on
upon triple net lease terms.
With a triple net lease, the tenant is
also responsible for the proportionate
share of all operating expenses
associated with the property.
Lease rates for new construction
such as Sticks at Midtown or 777
Center Street are between $1.65 and
$1.85 per square foot based upon triple
net lease terms. Lease rates also vary
based upon size, location and build out.

The 777 building, the former Maytan Music

Center, is getting a multimillion dollar
makeover. A before shot shows the
building prior to remodeling, along with
recent construction photo and an
artists rendering of the completed project.
Courtesy photos

With the improving health of

the Reno economy, we believe it is
safe to assume that the growth and
development of the Midtown District
will only continue to accelerate.
If you have yet to experience
the Midtown District first hand, we
encourage you to take an afternoon or
evening and explore the area. You can
stop in at Chuys Mexican Kitchen and
enjoy a specialty margarita, sit down at
Midtown Eats for a delectable burger
or head to the patio at Death & Taxes
and enjoy an upscale craft cocktail that
will blow your mind. Whichever you
choose, this fantastic area of town will
leave you coming back for more.
Cochran and Ruzzine are brokers
with the Sperry Van Ness Gold Dust
Commercial Associates.

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Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com | 7

Commercial developer sees the big picture

Panattonis Doug Roberts continues to make his mark on the regions commercial real estate landscape
NNBW Staff
He has developed and built some
of the most significant office and
commercial real estate projects in this
market. He has developed more than
3.5 million square feet here in northern
Nevada for tenants such as Jarden,
Trex, Petco, Urban Outfitters, Bally
Technologies and many more.
His company is completing work
on the new Petco distribution center
this month and has broken ground
on the largest speculative project
ever to be built in northern Nevada.
The first phase of that project, called
North Valley Commerce Center, is
a 707,000-square-foot cross dock
building scheduled for completion
around the end of the year.
Named one of the Developers of
the Decade at the recent 10th annual
Summit Awards, Doug Roberts of
Panattoni Development has seen the
region grow and transform. Now, at
the forefront of northern Nevadas
economic recovery, he is making
his mark on the landscape of our
community more than ever.
I believe companies will continue
to look to Nevada as California
continues to have a challenging
business environment and we are
developing property both in response
and anticipation of that need, said
Roberts. We have a comparatively
lower cost of living, low taxes and
business-friendly regulations. In
addition to California companies
looking to move east, companies
throughout the country see Nevada,
and specifically Reno, an ideal location
from where they can distribute their
goods throughout the western United
States. Those factors have made
this region attractive to real estate
investors as well.
A partner with Panattoni with
more than 25 years of experience
in real estate, Roberts oversees
development in Reno, Las Vegas and
Arizona for the company. With more
than 3.2 million square feet of new
development planned this year in
Nevada alone, Roberts makes it his
business to understand the intricacies
and hopefully the direction of each
market.
The northern Nevada market has
seen extreme highs and extreme lows
in the past decade, said Roberts.
We are seeing values of existing
properties rise and new projects start
to come out of the ground, which is
a great change of pace from recent
years. The North Valley Commerce
Center is a prime example.

The hope is that the growth is

sustainable and that what we are
doing contributes to the economic
recovery of northern Nevada, said
Roberts. We have all experienced
the alternative during the economic
downtown in 2008 so we are focused
on sound fundamentals.
Roberts is responsible for all
aspects of the development of office,
industrial and retail projects as well as
the supervision of staff and personnel.
He actively oversees development
managers, during preliminary and
ongoing stages of the budget and
throughout the construction process.
He takes pride in taking on each
projects unique set of challenges to
create an end product that is costeffective, functional and attractive to
tenants and prospective buyers.
It is rewarding to find a location
with great potential and turn it into
a product that fits the needs of a
company, said Roberts. I enjoy
building lasting structures that will
serve their current and future users
well over time.
Roberts calls northern Nevada
home, where he lives with his wife
and children. His investment in the
community does not stop at land.
He is active in several key
professional organizations in an
ongoing effort to advance his
skills and the industry as a whole.
Roberts is the current president of
the Northern Nevada Chapter of the
National Association of Industrial and
Office Properties (NAIOP) and an
associate member of the Society of
Industrial and Office Realtors (SIOR),
Nevada Development Authority (NDA),
the Economic Development Authority

of Western Nevada (EDAWN),

Commercial Real Estate Women
(CREW) and Certified Commercial
Investment Member (CCIM).
In addition to his professional
affiliations, Roberts is a current
member and the past president
of the Reno Central Rotary and a
founding board member of the Keaton
Raphael Memorial (now known as the
Northern Nevada Childrens Cancer
Foundation), an organization assisting
families with children battling pediatric
cancer.
My wife and I saw a need for
programs and services for families
in the fight here in Northern Nevada
through some friends who were

Officials break ground in October

on the new Petco Distribution Center
in North Valleys, constructed by
Panattoni Development.
Courtesy Panattoni Development

affected, said Roberts. We have

been working along with the rest of
the board on serving those needs for
over a decade now.
If market conditions continue to
improve as we all hope they do, you
can expect to see more and more
activity from Panattoni as well as
other developers, said Roberts. I am
looking forward to the advancement
and growth we are anticipating in the
years to come.

Business Law
Its more important than ever to protect your firms share of the
market and build relationships with potential clients.
Northern Nevada Business Weekly is pleased to provide an
opportunity to showcase your firm to 10,000 business leaders.
Business Law is scheduled for publication by Northern
Nevada Business Weekly on September 14. The content of
this glossy magazine covers a variety of legal issues faced by
business owners and managers.

Publishing: Monday, September 14, 2015

To advertise, contact your
sales representative today.

Wayne OHara

Northern Nevada Business Weekly

775.850.2283
wohara@nnbw.biz
5355 Kietzke Lane Ste. 100 Reno, NV 89511
Doug Roberts, a partner with Panattoni Development, speaks to guests at the Petco groundbreaking.
Courtesy Panattoni Development

8 | Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com

The Tesla effect on the investment market in the region

By Tom Fennell
The national and regional news
of Telsa and other viable companies
relocating to the area is creating
an interesting market dynamic for
commercial investment property in
northern Nevada.
Prior to the Tesla announcement
and during the throes of a nasty
recession, we saw discounted pricing
and higher capitalization rates than we
are seeing today. Is this created by
the Tesla effect, a healthy economy,
or a combination of both?
During the recession, Reno and
other tertiary markets similar to our
demographic were viewed as risky
markets to invest in real estate in
comparison to major markets. As is
typical during economic recovery, the
major metropolitan areas around the
country were the first markets to see
recovery in leasing, development and
investment activity.
Nationwide investment volume
was up almost 40 percent in the first
quarter of 2015. But as the national
economy has come back, the ability
to achieve desired returns has
gotten more competitive in major
metropolitan areas and real estate
prices have increased dramatically.
This has caused national or regional
developers, investors, and landlords
to look at smaller markets for higher
yield opportunities.
Another factor in the increased
investment demand has been
historically low interest rates for an
extended period of time.
The Fed has maintained a
stance of keeping interest rates low,
which helps investors and users of
commercial real estate leverage to a
higher price point in their search for
their real estate purchases as a result
of lower borrowing costs.

Apartments

continued from p1

Preliminary data indicate only 634

units sold in the second quarter.
One significant sale in the second
quarter was the 184 Caviata complex
at Kiley Ranch in Sparks. Oakmont
Properties Caviata LLC., of San
Rafael, Calif., purchased the complex
in May for $33.8 million.
With numerous transactions in the
works, the pace is about to pick up
substantially.
Two large communities are
headed for auction in the coming
months: The Village at Iron Blossom,
with 404 units, and Viscaya Hilltop
Apartments, with 318 units.
The sales of three additional
complexes 300 units, 200 units and
256 units are pending.
A good chunk are pending for the
third quarter, Noursoultanova said.
Up in the air for the near term are
Lakeridge East and Lakeridge West.
Both have been embroiled in separate
foreclosure processes for a few years,
Rowley said.
Thank God were running out
and the country is running out of
foreclosed properties, he said.
The asking price for multifamily
properties is trending up in the region.
In May, the median price per unit for
multifamily properties was $75,016.66
in the Reno metro area, according to
loopnet.com. Thats up 6.7 percent
compared to three months prior and up
41.6 percent compared to May 2014.
The pace of construction is also
gaining ground.

Analysts have
kept saying interest
rates are going to go
up for years, however
after the latest Federal
Reserve meeting, the
Fed said they may not
have any increases
until December
and even then a
potential increase
will be incremental.
Combining the Tesla
announcement with
uptick in our local
economy, and we now
have serious interest
on investment demand,
such as in the following categories.
Apartments and industrial
Investment in commercial
real estate was certainly not at a
standstill during the recession in
northern Nevada. There were active
investors in our market that were
able to acquire assets well below
replacement value. The most sought
after asset classes for investment
in our region have been apartments
and industrial. Those two sectors
were the better performers during the
recession as compared to office, retail
and land. Apartments and industrial
have long had the lowest vacancies
in our area and have been the first
assets to see cap rates compressing.
Apartments have also had the
most flexible lending terms as banking
institutions saw the multifamily market
as one of the safest.
This ties back into low borrowing
costs and has added to the
competition of the apartment market.
Low interest rates, more favorable
terms from banks as compared with
other sectors and good indicators
(low vacancy, high demand) has
brought a highly competitive mentality

Several projects are under

construction and others are in various
stages of planning, with a potential
increase of 3,558 units to be added to
the market in the next couple years.
Other developments in the very early
stages could put that at 6,200 or
more.
It takes about two years to move
a project from the planning stage to
completion, Noursoultanova said.
Residents began moving into
the Edge Water at Virginia Lake,
a Silverwing development, in July.
Completion of all 288 apartments and
condominiums is expected by this
time next year.
Kromer Investments expects the
288 units in the Villas at Keystone
Canyon Phase I to be completed by
the end the year. Even as that project
finishes, Kromer is planning Phase II
with 120 additional units.
Entering Phase II of construction
are the Bungalows at Sky Vista with
completion of the 158 standalone
bungalows expected in October
The Village at Arrow Creek, a
Ryder Home development in South
Reno, will bring online another 120
units in January 2016.
We have a staggered delivery,
of apartment units going online,
Noursoultanova said.
Theyre not all at once hitting the
market, she said. Were fortunate
its happening in a disciplined market.
Currently, planned apartment
complexes are focused on A-Class,
which provide a higher return on
investments for contractors.

into our apartment

market as compared
with some of the
other asset classes.
Can apartments in
our market still be a
good investment?
Absolutely! But finding
quality product and
desired yields is, and
will continue to be,
very challenging.
Industrial is
seeing some of the
same trends with
Tom Fennell institutional buyers
completing large
transactions in the
market. Another factor in our industrial
market is that the majority of market
is controlled by institutional owners
that have a tendency to pursue large
dispositions, so the number of true
investment transactions for a one off
product can be limited. In comparison,
apartment transactions involve more
regional and local owner/operators.
Office and retail
The cap rate compression we are
seeing in the apartment and industrial
markets has caused investors
to consider other asset classes
such as office and retail. Demand
for investment deals also causes
investors looking for quality, low risk
deals to adjust their expectations of
returns, furthering interest into other
areas.
As prices go up, yields go down
and as product is limited in traditionally
sought after assets classes and areas,
investors are increasingly looking
more at value added scenarios than
in previous years in our region, which
is driving renewed interest in the
office and retail markets. According
to the 2015 Pension Real Estate
Association Investment Survey, 77

Hopefully a group of developers

will focus on workforce apartments,
Rowley said.
Apartments in the area that are
15-20 years old and still considered
Class-A because of location and
maintenance will have a hard time
keeping up with new Class-A
apartments, he said.
Multifamily development activity in
Sparks is especially active. Expect an
estimated 1,238 new units to hit the
market in the next couple years.
Thats not surprising when you
consider that Sparks is the city closest
to the Tahoe Reno Industrial Complex
where thousands of new jobs are
expected to open up when the new
Tesla gigafactory plant, Panasonic

percent of investors who responded

said they expect to buy value added
investments in the U.S. this year.
What is the downside in all of this
investment demand and growth?
Due to reported increases in
future job growth and the Tesla
effect, owners have a perceived
value in their real estate holdings that
is far exceeding normal valuations.
Rental rates are a key component
in valuing and underwriting
commercial real estate, and we
havent seen the economics of our
commercial rents change enough to
warrant the inflated expectations of
value. From an investor standpoint, if
you are buying an asset at a low cap
rate, and you dont achieve the rent
growth you are projecting, the results
can be punitive. Financial underwriting
adds to the investment stress with
difficult terms and problematic
appraisals not matching up with
anticipated property values.
We certainly have seen
speculation in real property increase,
and out-of-the area investors are now
looking at northern Nevada as a viable
region to place capital. However, the
perceived rent growth, job growth
and property economics have not
yet changed to warrant some of the
asking prices that we are now seeing
in the marketplace.
Though there is still plenty
of product and repositioning in
the market, realistic growth and
value expectations will be the key
in successfully disposing and/or
acquiring an investment property.
Over the next several years, we
anticipate that the abundance of job
creation will significantly impact our
area, which will fuel new development
in all real estate classes.
Tom Fennell is a principal and broker
with Dickson Commercial Group.

offices, Switch fiberoptic complex, and

others open for business beginning
next year.
LandCap Development plans
to redevelop the former Silver Club/
Bourbon Square casino/hotel on
Victorian Square in Sparks into a 98unit apartment building. The company
also is in the early planning stage
for a 920-unit complex adjacent to
the Legends Outlet in Sparks and
to convert a parking garage at the
Sparks Marina into 220 apartments.
Its an exciting time to be in
northern Nevada, Rowley said.
Unlike the last big boom, which was
a one-trick pony (due to the limited
economic diversity), this one seems to
be very broad based.

The Village at Iron Blossom is up for auction, one of several large apartment
complexes expected to change hands in the third quarter of 2015.
Sally Roberts/NNBW

Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com | 9

Office Market

continued from p1

Kietzke Lane is usually local

developers wanting to sell to a local
market, he said of the tenant mix,
which are mostly Nevada-based
companies.
In South Meadows, youre
selling to a national market, he said
of leasing activity. The area, which is
becoming a tech hub by virtue of new
tenants like Grand Rounds, attracts
business owners and office workers
who want an open plan, meaning
fewer cubes and walls.
With downtown Reno catering to
many law firms, accounting offices
and financial services businesses, the
standard office set up will continue.
While they want the latest in
technology upgrades, These are
people who need privacy for their
clients, so an open office concept
doesnt fit the bill.
In terms of Class A buildings,
there is a race for the best space,
tilting the scales in favor of landlords
when leases come up for renewal.
Many transacted fire sale leases at
the depths of the recession five years
ago.
In a recovering economy, that no
longer applies. So look for growth in
rents.

Food

continued from p1

Foodservice, Costco, Wal-Mart, Raleys,

SaveMart, Safeway, Harrahs and
served at many Nevada and California
restaurants.
Founder/CEO Fran Pritchard came
from California to Gardnerville 22 years
ago when her husband retired from
IBM.
Shed spent years as a manager in
the commercial food service industry,
where she became known for her fresh
salsa, which customers told her was
killer, hence the company name.
In 1993, frustrated with working at a
local mini mart, she decided to test the
market with a fresh salsa product she
made in a local restaurant kitchen after
hours. After getting positive feedback
from local restaurants and delis,
Pritchard decided she had the recipe for
a viable business and she remembers,
thats when the learning process
began.
One of the biggest hurdles she
faced was finding a new home with
room to expand when her plan to sell
the company failed several years ago
after shed sold off all her equipment
and gave up her space to another food
manufacturer.
Due to all the new government
regulations, which she says are
choking small food businesses, by going

Landlords are going to be

demanding more money, which will
shift many tenants to more affordable
Class B and C buildings, he
predicted.
Reno is an interesting market,
said Ruffin. Office space utilization is
highly dependent on the strength of
the local economy.
Its a regional office not a
national headquarters kind of
market.
Still, the mood is more upbeat in
the commercial real estate circles.
Sales will be strong if you can find
investment properties, said Ruffin.
A big factor?
Once Tesla was announced,
attitudes changed and Reno
changed, he observed.
Teslas arrival will not only
impact the commercial real estate
market, but the residential market as
well, said Molyneaux, talking about
the potential housing needs of its
employees and those gearing up to
meet the demand
For the rest of 2015, Ruffiin
expects reasonable activity in the
Reno-Sparks office markets. Itll be
an average year, he said.
Even though economic
fundamentals are much improved,
Were still coming from a low bar, he
added, referring to the toll wrought by
the Great Recession.

Tim Ruffin

Melissa Molyneaux

Renown picked up the Reno Tahoe Tech Center building for $11 million.
Courtesy photo

way overboard with no common sense,

she had to locate a 4,000-squarefoot property that would meet her
expansion needs, accommodate her
eight employees and invest in all the
necessary improvements, including a
new walkin refrigeration system, a roll
up door for her trucks, separating out
the production area from inventory and
shipping, and adding new drains for
sinks and toilets at roughly $3000 per
drain.
Now being subjected to thirdparty audits for food safety, Pritchard is
required to document everything that
takes place in the building and must
keep the doors locked due to a new
bioterrorism act.
A benefit of being in business in
a small community is the synergy that
exists with other food manufacturers.
We work to help each other out and
promote each others business,
Pritchard said.
A relationship with Val and Sal
Gray of Italian Hearts Pasta Sauces in
Gardnerville is a prime example.
When they met several years ago,
the Grays were preparing to build a
production facility/cafe in mid-town
Reno.
After losing jobs in the recession,
friends suggested and supported
creating a business around the
traditional sauce that was a mainstay of

The staff bottles original recipe Killer Salsa for sale at Costco.

their regular dinner parties.

Funding was a major hurdle.
Undeterred, the Reno couple began
building the company in a shared
Sparks commercial kitchen, which
didnt pan out. Then they explored
the idea of working with a co-packer.
But we wanted what we served to our
friends and family to be what we sell
commercially, Gray said, and notes the
co-packing option meant giving up the
quality control which would guarantee
their high standards of taste and
nutrition
The Grays found great compatibility
with Prichards business model and
values, sharing many of the same fresh
ingredients and production standards,
especially around cleanliness.
They were able to take over the
turnkey production facility two years

Sal and Val Gray are seen

slow cooking a batch of sauce.
Photos by Susan Ditz

ago, which continues to be a better

business solution, even with the regular
commute.
Although they sell their three
Italian Hearts brand sauces through
four Whole Foods stores and other
groceries, including Raleys, the couple
also has an Etsy storefront and markets
directly to customers at local events and
from their facility at 1425 Industrial Way
Suite C in Gardnerville.
People can come here and get
their whole dinner, she says. That
includes her homemade heart ravioli.

10 | Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com

In her own words:

ArchCrests Erin Krueger-Seipel
Name/Title/Company: Erin Krueger-Seipel, Marketing and Office
Manager for ArchCrest Commercial Partners where I am
also a part of the Krueger Land Team.
Number of years with company: 3
Number of years in the profession: 17
Education: BS in Business Administration with a minor in
marketing from the University of Nevada, Reno
Last book read: Yikes, its been awhile. Does Pinterest count?
Favorite movie: Too many to name. Im a sucker for any
romantic comedy.
Favorite musical group or genre: I love music and all genres so its
hard to name my one favorite. But if I must, it would be the
Dave Matthews Band.
Spouse, kids or pets: Husband and just two four-legged children
for now a Labradoodle and a 20-pound cat.
Northern Nevada Business Weekly: Tell us about your company and the duties of your
position:
Erin Krueger-Seipel: ArchCrest Commercial Partners is an independent commercial
real estate brokerage firm offering an array of commercial real estate services in
northern Nevada. I wear a lot of hats for ArchCrest. Primarily, I work alongside my
mentor and father as part of the Krueger Land Team where we specialize in the sale
of residential land. I also serve as the office and marketing manager where I oversee
all marketing efforts and day-to-day operational activities.
NNBW: How did you get into this profession?
Krueger-Seipel: When I was just 16, my dad hired me to help around his office, doing
tasks such as filing, entering business cards and typing letters. He was with Grubb
& Ellis-NCG at the time and I was soon hired on as the marketing assistant. I worked
my way up from there, adding on responsibilities and changing job titles over the
years. I grew up in this business and I fell in love with it early on, which is why Im still
here 17 years later.
NNBW: Tell us what it was like to start your own business? How did you go about the
process of getting started?
Krueger-Seipel: I was very fortunate to be a part of the creation of ArchCrest
Commercial Partners. I helped create the companys brand, marketing plan and
operational processes. It was a fun learning experience.
NNBW: What is one of your biggest professional accomplishments?
Krueger-Seipel: In my job capacity, its very easy to get stuck behind the desk. So a
few years ago, I decided to step outside my comfort zone and get more involved
in the real estate community by joining CREW (commercial real estate women).
This organization really brought me out of my shell. I was voted onto the board of
directors and then honored with the opportunity to serve as the northern Nevada
chapter president. This is definitely one of the biggest accomplishments of my
career.
NNBW: What do you enjoy most about working in your field?
Krueger-Seipel: I love that after 17 years in this business, I am continually faced with new
challenges. I also enjoy being a part of this markets growth and development. Its
truly rewarding to see a piece of dirt I helped market become a new development.
NNBW: Whats the most challenging part about your job?
Krueger-Seipel: While I love all the hats I wear at the office because it keeps the job
interesting, it is very challenging to maintain a high level of quality when you have to
juggle them all at once.
NNBW: What advice would give anyone who wants to get in your profession?
Krueger-Seipel: Going above and beyond what is expected really pays off in the long
run!
NNBW: What was your first job?
Krueger-Seipel: I worked in a nursery at our neighborhood church where I fed, changed
diapers and tried to keep happy several infants at one time.
NNBW: What are your hobbies? How do you spend your time away from work?
Krueger-Seipel: Ive had intentions of taking up serious hobbies in past, like
photography, but never actually havenot yet at least. I like spending my free time
with family (I have a pretty awesome one). I absolutely love being an auntie and
spend every chance I get with my nieces and nephew. I use them as my excuse to
see the latest cartoon in the theatre, go to awesome places like Jump Man Jump,
color in coloring books and really just be a kid again.
NNBW: Do you have a favorite vacation spot?
Krueger-Seipel: I used to love a Mexican beach vacation, but unfortunately my last
vacation, which was my wedding and honeymoon, resulted in a hurricane and
becoming a refugee of Mexico. Im now staying close to home these days and
enjoying beautiful Lake Tahoe or the California Coast.
NNBW: If you had one moment in time to cherish for the rest of your life either
professionally or personally what would it be and why?
Krueger-Seipel: Marrying my husband because he truly brings the best out of me and
life is so much better with him in it.
NNBW: Last concert or sporting event attended?
Krueger-Seipel: I recently saw Ed Sheeran perform at the Greek Amphitheatre in
Berkeley. He is such a talented artist and it was an amazing experience to watch
him perform live. His show definitely made my top 5!
NNBW: What did you dream of becoming as a kid?
Krueger-Seipel: It might sounds crazy but I actually dreamt of working in an office as
a kid! I used to set up a desk by the home phone and would wait for it to ring so I
could take messages (it would never ring) and my favorite Christmas present from
Santa was personalized stationery and a briefcase. I would beg my dad to let me
go to his office so I could file paperwork and buzz all the different cubicles from his
phone. Funny how filing is now my most dreaded task!
NNBW: If you had enough money to retire right now, would you? Why or why not?
Krueger-Seipel: I honestly think I would be bored not working, though this is my prechildren self speaking. If I had enough money to retire right now, I would, but I
would stay in the game by investing in real estate and managing my own assets.
NNBW: Why did you choose a career in northern Nevada? What do you like about
living/working here?
Krueger-Seipel: My parents tried ruining my life by moving me to Reno after my
freshman year of high school. Little did I know then that it would be the best thing
they ever did for me and I would grow to love northern Nevada and never want
to leave. I was given an early opportunity for a prosperous career that I decided
to stick with, so I attended college at the University of Nevada, Reno so I could
continue working and growing in this profession. I love the four distinct seasons that
we have here and that we go from 0 to 100 degrees over the course of a year. I love
the people in this community and the opportunities northern Nevada has given me
and my family.

Museums rooftop renovation

embraces the Nevada sky
By Sally Roberts
sroberts@nnbw.biz
A new rooftop look is under
construction for the Nevada
Museum of Art
Work is underway to make the
original, under utilized, outdoor
space into a more hospitable and
elegant year-round venue.
More than a year ago,
museum officials took a close
look at underleveraged revenue
opportunities, museum Executive
Director David Walker said at a
recent event to announce the
project.
We have doubled our operating
budget in the last five years, Walker
said. As we continue to develop
new programs, it costs more.
The fourth-floor rooftop was
high on the list of underachieving
spaces.
When the museum was
constructed in 2003, the rooftop
was created as a unique venue with
panoramic views of the city and
Sierra. However, thanks to northern
Nevadas summer winds and
inclement winter weather, it remains
empty much of the year.
Architect Will Bruder, who
designed the original building, was
charged with developing concepts
to solve the weather challenges of
the rooftop while also creating a
dramatic architectural addition to
the museum and downtown Reno.
Renamed the Fred W. Smith
Penthouse, the $5.5 million recreation of the rooftop is expected
to be completed in early 2016 and
include an enlarged, windowed
inside space plus protected outdoor
area.
The 4,800-square-foot
Nightingale Sky Room features
retractable floor-to-ceiling glass
walls that provide a sheltered
interior space but can be opened up
in good weather. Up to 250 people
can be seated for formal dinners, or
397 for concerts, parties, lectures,
conferences, workshops, childrens
programs and other special events.
Noted Reno-area restaurateur
Mark Estee is helping design a
state-of-the-art banquet kitchen.
Outside the Sky Room will be
the Stacie Mathewson Sky Plaza
with nearly 5,000 square feet of
patio space protected by glass
parapets that block the Nevada
winds but not the views.
Opening the Sky Room to
encompass the Sky Plaza can
increase dinner seating to 500
people.
Clark/Sullivan Construction
was called in as the contractor
for the project. The Sparks-based
construction company has been the
general contractor for every major
capital development at the museum
since its inception in 2003.
They know us, know our
business, Walker said.
Clark/Sullivan also did the
work on the recently remodeled
museums E.L. Cord Museum
School, which Walker pointed to
as an example of boosting the
revenue stream for the museum
with an existing program. The

By increasing
the usefulness
of the rooftop
venue, the
museum expects
to substantially
increase its
revenue flow
from special
events, including
weddings.
school, previously hidden inside the
museum, presents a variety of art
classes for all ages.
Tuition increased 35 percent
over the last five months, tied
directly to being more visible. If
people dont know where you are,
people dont come, Walker said.
By increasing the usefulness
of the rooftop venue, the museum
expects to substantially increase its
revenue flow from special events,
including weddings.
We do 10 weddings per year
now (at the museum), Walker said.
Well be doing about 30 after the
Sky Room is completed.
The Sky Room is named and
designed with homage to the
historic Mapes Hotels elegant
top floor Sky Room. The Mapes in
downtown Reno was imploded in
2000.
People have fond memories
attached to the Sky Room, Walker
said. We felt we could become the
Sky Room for the 21st century.
Currently, most special events
in Reno are held in the citys hotel/
casinos, he said.
Thats fine. Were not going
to take that away from them. But a
lot of people, a lot of organizations
would like a more inspirational
location. We will have the most
unique space in northern Nevada.
Steven Nightingale, with the
Nightingale Family Foundation Trust,
which donated the seed money
to get the project started, helped
develop the rooftop project from
conception.
The theme present in every
conversation I had with David
(Walker) and Will (Bruder) was,
what is a museum? and what
does a museum do?
A museum collects beauty and
safeguards it and offers it to the
community.
The museum, is conceived
as a place we can gather as a
community and have the best
chance to do our best work
together, Nightingale said.
Funding for the Sky Room
project came from generous
support from individuals and
foundations, most of which have
had a long relationship with the
museum.
For all intents and purposes,
fundraising is over (for the rooftop
project), Walker said.

Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com | 11

South Meadows recovery increases speed

By Sally Roberts
sroberts@nnbw.biz
The South Meadows office market
is again trotting along after being
tripped up in the recession.
Through the first half of the year,
our net absorption (of office space) is
larger than all of last year, said Matt
Grimes of CBRE Office Services.
In the last few months, Grand
Rounds healthcare, BlackRidge
Technology and Coupa office software
developer, snagged some of the last
large Class-A spaces with freeway
visibility, all on Professional Circle
between Double R Boulevard and
Interstate 580.
Fronting the freeway, there are
limited options, Grimes said. The
best available spaces are leasing out.
On the northern edge of South
Meadows, The Nevada Department
of Wildlife is moving in to 6980 Sierra
Center Parkway space, long empty
after Microsoft and Intuit moved out.
Office building sales are also
moving forward.
In May, Renown Health purchased
the 63,200 square foot building at
10315 Professional Circle. Even though
it was considered a distressed sale
because of low vacancy rates, its
close proximity to Renowns South
Meadows campus, plus having data
center technologies in place, made
it a prime office acquisition for the
areas largest medical provider.

In the last few

months, Grand
Rounds healthcare,
BlackRidge
Technology
and Coupa
office software
developer, snagged
some of the last
large Class-A
spaces with freeway
visibility, all on
Professional Circle
between Double R
Boulevard and
Interstate 580.
Renown paid $11.7 million, or more
than $184 per square foot.
Nev Dex Properties purchased
10345 Professional Circle for $9.5
million earlier this year. The 64,300
square foot building houses offices for
Grand Rounds, Aerotek, PC-Doctor,
Inc., and Lennar.

The office market in the South

Meadows has been impressive this
year, Grimes said, but there are still
long-term vacancies that need to be
filled.
Second quarter numbers are still
being compiled but are expected to
show continued improvement from
the depth of the recession when
South Meadows office vacancies
climbed to 28.1 percent.
First quarter numbers were hurt,
in large part, to the market return of

the former WMS Gaming Building on

Trademark Drive and the complex at
10315 Professional Circle. The office
vacancy rate climbed to 18.6 percent
compared to 15.6 percent in the fourth
quarter of 2014.
With the Professional Circle
building now part of Renown, and the
move-ins by Grand Round, BlackRidge
and Coupa, expect to see second
quarter vacancies back in line with the
overall trends.

Renown Health recently purchased the 63,000 square foot building in the Reno Tahoe Tech Center
for $11.7. Located at 10315 Professional Circle, its located just south of its South Meadows campus.
Sally Roberts/NNBW

Fidelitone gets new fulfillment center in Sparks

NNBW Staff
Fidelitone Logistics Inc. closed a
deal in June to lease a 95,200-squarefoot distribution space in Sparks for an
order fulfillment center. Its expected
to be operational by August.
The Sparks location at 1135
Southern Way, the companys second
in the area, will support Fidelitones
order fulfillment clients requiring
direct-to-consumer fulfillment to
consumers in the western half of the
United States. They also operate a
center with more than 50,000 square
feet on East Parr Boulevard in Reno.
Fidelitone, headquartered in
Wauconda, Ill., provides third-party
logistics and supply chain solutions for
Fortune 100 companies and start-ups
in the United States and internationally.
Fidelitone was founded in 1929 as
a phonograph needle manufacturer.
Today it processes thousands of
orders from small parts to large
palletized products daily and ships
to 120 countries.

The company was recognized by

Inbound Logistics as a Top 100 thirdparty logistics provider in 2013 and
2014. Fidelitone has been featured
in the Crains Chicago Business
exclusive ranking of the largest
privately-held companies for five years
running, and was named to Inc.s
500 | 5000 list of the nations fastestgrowing private companies in 2014.
Representing the landlord,
Morrison Street Capital, LLC, in
the Sparks-lease transaction were
commercial specialists J. Michael
Hoeck, Dave Simonsen, Michael
Nevis, and Steve Kucera of NAI
Alliance Industrial Properties Group.

Morrison serves as the investment

manager of a series of discretionary
real estate funds based in Portland,
Ore.
Working on behalf of Fidelitone
was Bryan Gardner of Reno Property
Management.
In other commercial real estate
news, the building at the Tahoe Reno
Industrial Center housing the Zulily
distribution site changed hands this
week.
CBRE Global Investors has
brokered a deal on behalf of an
unnamed U.S. client to acquire the
property. Zulily, Inc. has a long-term
lease for the 707,010-square-foot

Industrial is a very in-demand asset class at

this time, and were able to acquire a newly built,
high-quality asset that should deliver a secure
income stream to our client, in excess of yields
that would be achieved on a similar industrial product.
Mike Everly, Portfolio Manager, CBRE Global Investors

warehouse/distribution site at 3200

USA Parkway.
Zulily, an e-commerce business,
sells clothing, toys and home products
catering to mothers and children.
Developed on a build-to-suit
basis in 2014, the property is among
the newest deliveries to the RenoSparks MSA and includes high-quality
construction and state-of-the-art
building features that serve the
tenants ecommerce requirements
and future growth needs.
Industrial is a very in-demand
asset class at this time, and we
were able to acquire a newly built,
high-quality asset that should deliver
a secure income stream to our
client, in excess of yields that would
be achieved on a similar industrial
product, said Mike Everly, Portfolio
Manager, CBRE Global Investors.
TRIC is a master-planned
industrial park located 12 miles east
of Reno in McCarran on Interstate
80, a major national transportation
thoroughfare.

Bank backs new downtown Reno health clinic

NNBW Staff
U.S. Bank is investing $5.6 million
in the construction of a new, nearly
$20 million medical facility for the
Northern Nevada HOPES clinic that
will care for an additional 400 patients
a month, including for the first time,
primary pediatric care.
The clinic, which is operating out
of a modular building at 580 W. Fifth
St., is under construction now and is
slated to be completed by December.
The new 37,500-square-foot building

will span three stories and be

named for its benefactor The Stacie
Mathewson Community Wellness
Center.
The new HOPES clinic will be
Renos first integrated care facility,
where patients will have access to a
wide range of medical and wellness
services in one location, said HOPES
CEO Sharon Chamberlain.
It will become a medical home
for 10,000 patients a year, the vast
majority of whom are low-income or
homeless individuals. A medical home

is akin to a traditional physicians office

where all non-urgent care begins and
is coordinated.
HOPES performed a needs
assessment of its area downtown
and found that there is a tremendous
shortage of medical providers (3,952
patients for every provider).
Northern Nevada Hopes is
vital to so many in the greater
Reno area who struggle to access
comprehensive and quality health
care, said Maria Bustria-Glickman,
vice president of U.S. Bancorp

Community Development Corporation.

U.S. Bancorp Community
Development Corporation invested
$5.6 million in equity that comes from
New Markets Tax Credits. That $5.6
million was provided to community
development organizations that
loaned the money to the clinic at
below-market rates that help close a
financing gap.
The clinic expansion will generate
105 construction jobs, 43 new
permanent positions and retain 52
existing jobs.

12 | Northern Nevada Real Estate Journal | Monday, July 27, 2015 | www.nnbw.com

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