Responding to continuing demand for new industrial product in northern Nevada, Dermody Properties has acquired more than 26 acres in northwest Reno, Nev., for a two-building development totaling 429,000 square feet. LogistiCenter at I-80 West Phase II is adjacent to the first phase of the industrial park completed in 2017.
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Construction is expected to begin in the summer of 2022 on the site at Boomtown Garson Road. Building 1 will be 170,500 square feet and Building 2 will be 258,500 square feet. Planned features will include a 32-foot clear height, 85 dock high doors, more than 300 auto parking stalls and the latest ESFR sprinkler system. Dermody, a Reno-based national private equity real estate investment, development and management company focused exclusively on the logistics real estate sector, will be making on-site and off-site improvements including enhanced landscaping throughout the project. The firm will also add a publicly accessible walking and bike trail system around the perimeter of the business park.
The logistics park is located 4 miles from the California border, with immediate access to and highway frontage along Interstate-80. The location provides prospective tenants the advantage of access to a major highway to manage current high-speed delivery expectations. Northern Nevada is the hub of an 11-state western region with 53 million people within a one-day drive.
Dickson Commercial Group arranged the land purchase. Leasing, which is ongoing, is being handled by DCG’s industrial team of Joel Fountain, Baker Krukow and Nick Knecht.
John Ramous, partner in Nevada at Dermody Properties, said in a prepared statement the time was right to leverage the growing market to benefit the company’s customers. He noted leasing activity has been resilient in the region, with multiple leases of more than 100,000 square feet over the last few quarters.
Ramous also said net absorption for the third quarter was 1 million square feet, representing the ninth quarter in a row that net absorption was more than 800,000 square feet. Noting vacancy rates are about 3.6 percent, he added demand for newly built properties continues. In the third quarter, 4.6 million square feet of construction was in play, with an additional 2.1 million square feet set for groundbreaking. Citing another example of strong demand, he said early tenant renewals have become more common as occupiers look to secure space in the growing market.
Dermody also owns LogistiCenter at 395, a multi-phase, master-planned industrial park totaling more than 2.8 million square feet in the North Valleys submarket of Reno-Sparks. That property is 8 miles from I-80, 12 miles from Reno-Tahoe International Airport and within minutes of three major shipping providers—UPS, FedEx and OnTrac. PCCP LLC was Dermody Properties’ strategic capital partner on the industrial park.
Earlier this month, Dermody acquired a 446,850-square-foot cold storage facility in Kent, Wash., for $62 million from Olympic Steamship Co., according to King County Records. The structure, which is connected to rail service operated by BNSF, is less than 1 mile from State Route 167 and within 4 miles of Interstate 5. Downtown Seattle is 18 miles northwest.
In September, Dermody secured a new tenant for a 258,737-square-foot lease in Rialto, Calif. DGC Fulfillment, a third-party logistics company inked the five-year, full-building lease that will begin in December.
In June, Dermody closed its third industrial fund by raising $1.1 billion from investors. Dermody Properties Industrial Fund III L.P. surpassed its investment target and will focus on Class A logistic facilities nationwide.