The 195,000-square-foot speculative industrial building on Ingenuity Avenue is expected to come online by year's end. Panattoni Development Co.
The 136,760-square-foot speculative industrial building being constructed by Panattoni Development Co., and Alston Construction in Red Rock is the final piece of the Red Rock Business Park that started when Panattoni built the former Tyco Valves building in the early 2000s.
Panattoni has since developed millions of square feet of industrial space in the North Valleys, including nearly 3 million square feet of fully leased space at the North Valleys Commerce Center off North Virginia Street. The Irvine, Calif.-based industrial developer has added close to 10 million square feet to the total industrial inventory across Northern Nevada over the past two decades.
Paul Kinne, senior development manager for Panattoni in Northern Nevada, has seen his share of raw land in Red Rock transformed into an industrial hub occupied by many national retail brands and served by thousands of North Valleys residents.
“In my opinion, (Red Rock) put Panattoni on the map in Reno and made them a must-consider on any development deal,” Kinne said. “Northern Nevada has been great, but particularly the North Valleys, which has been the primary location for our (development) efforts.”
Panattoni’s first foray into Northern Nevada was constructing the old Amazon fulfillment center in Fernley. The 750,000-square-foot facility on Newlands Drive was built in 1999 but closed when Amazon constructed its new facility off North Virginia Street in 2014.
While Amazon chose another industrial developer to build its Reno-based state-of-the-art fulfillment facility, it did choose Panattoni for a 150,000-square-foot, last-mile facility that’s also in the North Valleys. Panattoni has completed two other projects for the massive online retailer in Southern Nevada as well.
Matt Clafton, senior vice president and western region manager for Alston Construction, said that much of Panattoni’s success in Nevada stems from the continued exodus of businesses from California.
“The success of Reno in a lot of ways has come because of the less-than-business-friendly climate in California,” he said. “We are also within 15 miles of the border both in Reno and Las Vegas – that has been one of our best marketing tools.
“Businesses want to get out of California for whatever reason,” Clafton added, “and we have a pro-business environment in the State of Nevada.”
Panattoni’s latest building under construction in Red Rock is a pure spec play and is scheduled for delivery in October, Kinne noted. The facility will mirror Panattoni’s Longley Commerce Center, he added, although that building was nearly twice the size as the one going up in Red Rock.
Like Longley, Panattoni plans to pursue smaller industrial users who’ve been hard-pressed to find new Class A space as larger tenants gobbled up entire big box industrial facilities, often before their buildings were completed. The Red Rock building will be divisible from 9,000 to 78,000 square feet, Kinne said. The industrial team at Kidder Mathews, led by Executive Vice President and Shareholder Mike Nevis, is in lease negotiations with tenants to take the space, Kinne added.
“Preleasing is a phenomenon that is a really strong aspect of this market, and hopefully it continues,” Kinne said. “It takes a lot of pressure off of us when we have a building that just started or we are just getting a roof on and we are negotiating with a tenant. It makes life a lot easier.”
Clafton told the NNBW that pre-leasing also helps the contractor determine final build-out, which can save time and money. For example, the electrical switching gear that brings power into and distributes it throughout industrial buildings has some of the longest lead times in industrial construction – up to a year or more, Clafton noted. Knowing how many tenants you have before final buildout helps determine how much of the key electrical components need to be installed, he added.
Panattoni and Alston Construction are also paired up on one of the last industrial buildings to go up in Spanish Springs. The 195,000 speculative industrial building on Ingenuity Avenue is expected to come online by year's end, Kinne said.
Although Panattoni has an affinity for developing in the North Valleys, it’s no secret that there’s no easy ground left to develop north of downtown Reno. At North Valleys Commerce Center, for instance, Panattoni cut 80 feet of dirt from one side of the project and moved hundreds of thousands of cubic yards of material in order to create pad space for the last few buildings.
Finding projects with suitable topography, infrastructure, and securing entitlements remain the biggest hurdles to overcome for Panattoni’s next projects.
“It’s not for the faint of heart,” Kinne said. “There is a lot of time that goes into these projects on the front end. But we have found new horizons, and we look forward to (developing) them.”
Added Clafton: “The low-hanging fruit is gone. You have to be creative when figuring out other sites. There are several sites that Panattoni has under control that will be our next steps.”
