Northern Nevada will begin to deal seriously with a big question this year: Where will it put industrial development now that traditional locations are nearly filled? As the new year dawns, economic developers and real estate agents who specialize in industrial property say they're swamped with requests from companies looking for new manufacturing and distribution locations throughout the region.
"The capital region is on fire," says Kris Holt of Grubb and Ellis Nevada Commercial Group.
"We have the most activity we've seen in the past four years."
In Washoe County, meanwhile, at least nine major companies are scouting plant sites, and they're looking for a total of more than 3 million square feet.
But Par Tolles, area director for Trammell Crow, says that the lack of available land in the Truckee Meadows means major new industrial users will need to look elsewhere Stead as well as the Patrick area east of Reno.
Panattoni Development, for instance, is expected to start construction soon on about 540,000 square feet of industrial space in the Red Rock and Lear industrial centers at Stead.
The Truckee Meadows will see some of its last major industrial development this year.Trammell Crow plans 380,000 square feet on land it's leased from Airport Authority.
DP Partners will complete development of its holdings in South Meadows with a 408,000-square-foot building and will complete development of its land at Dermody Business park with a 180,000- square-foot building.
Prologis will wrap up industrial development in Damonte Ranch with two buildings totaling about 400,000 square feet.
In all, Colliers International projects construction of about 2.6 million square feet of industrial space in the region this year.
In Carson City and surrounding counties, Holt says demand for industrial space is particularly strong at Mound House and near the Minden-Tahoe Airport in Douglas County.
That demand, he says, is coming largely from out-of-state firms looking to relocate their operations.
Already, Carson City and neighboring counties are home to about 300 manufacturing companies.
Prologis, the company based in Aurora, Colo., that owns about 3.7 million square feet in the Reno area, recently projected that the northern Nevada market for industrial space will be among the fastest to recover in the United States next year.
If demand for industrial space nationwide returns to normal, Prologis said vacancies in Reno will be filled quickly.
In Washoe County,Trammell Crow estimates the current vacancy rate in industrial property to be about 11.5 percent.
By the end of the year, Colliers International estimates the rate will fall to about 10 percent.
Colliers says lease rates probably will remain stable, although growing demand could push prices up.
Landlords are less likely, however, to make concessions such as shorter lease terms or free rent.
