CapRock Partners recently planted its flag in Northern Nevada with the off-market acquisition of a 707,010-square-foot industrial warehouse at Tahoe Reno Industrial Center.
CapRock Partners recently planted its flag in Northern Nevada with the off-market acquisition of a 707,010-square-foot industrial warehouse at Tahoe Reno Industrial Center, but the company headquartered at Newport Beach, Calif., is no stranger to industrial development and acquisitions in the Silver State.
Since 2017, CapRock Partners has acquired, entitled or developed more than 5 million square feet of industrial property in Southern Nevada, said Chad Ridenour, senior associate of acquisitions at CapRock Partners. Reno-Sparks had long been a target market for the company, though, as it continues its expansion plans.
“Nevada is a very familiar place,” Ridenour told NNBW during a recent video conference to discuss CapRock’s Northern Nevada acquisition. “But for Reno specifically, we've had our eye on the market for probably a year to two now, and we've just been patiently waiting for the right opportunity and continually developing relationships in the market that helps us to have these off-market opportunities.”
The building on 48 acres at 3200 USA Parkway was acquired in an all-cash deal, which helped CapRock Partners move quickly once it identified a target, Ridenour said. The building was constructed in 2014 and has nearly 15,000 square feet of office space with 36-foot clear heights. Brian Armon, senior vice president/principal with the industrial group at NAI Alliance, represented CapRock Partners in the acquisition and is the broker of record for leasing the currently vacant industrial facility.
“We were able to move pretty quickly on this deal given our ability to close all cash,” Ridenour said. “We executed this one in an efficient manner with terms that made sense for both parties.
“There has been some disruption in the capital markets, and we've seen a slowdown on the industrial development side as well,” Ridenour added. “But not having that contingency based on debt and partners and having the ability to close all cash really sets us apart from our competitors and makes deals easier.”
CapRock Partners has additional offices in Phoenix and Dallas that were opened as the company expands across the western region into the central region. The privately held company founded in 2009 has more than 30 million square feet of industrial real estate that it has developed, acquired or entitled.
Northern Nevada meets many of the company’s requirements for investment criteria, Ridenour said.
“We invest in high-quality industrial assets, and we develop Class A industrial product. This (acquisition) is right down the fairway with what we do and what we develop. The building is super functional and shows really well, and we are really excited that this building is in the TRIC submarket where you'll find many Fortune 100 and Fortune 500 companies.”
Reno’s proximity to a large western region customer base should prove a big draw to a potential tenant, Ridenour added. Reno’s lower cost for land, power and taxes also proved important aspects of the acquisition, he added.
“(From Reno) you can access over 60 million people in a one- to two-day drive time,” he said. “But the differentiator between Reno and even between Las Vegas, but mainly between Southern California, Phoenix and other areas is that the rental rates are cheaper. It's more business friendly with less regulations. The fundamentals are really great.
“From an investor standpoint, Reno has had some of the highest industrial rent growth over the last few years on a national level. It's a small city, but it's got a big splash on the industrial market as a whole.”
CapRock Partners seeks a single tenant to fill the building rather than subdividing it to meet the needs of smaller tenants, Ridenour said. CapRock is aggressively pursuing additional strategic value-add industrial properties and land sites for new industrial development in Northern Nevada and elsewhere, he added.
“We are actively pursuing other projects,” Ridenour said. “We are planting our flag, but we're also saying that we're here to stay. We'll continue to be a presence in the future, and if the right opportunity presents itself we would definitely develop a property. We're going to continue to press forward in the Reno market.”
Jon Pharris, co-founder and president of CapRock Partners, said in a statement that the acquisition of 3200 USA Parkway is a deliberate step in the company’s expansion efforts across key markets in the western and central U.S.
“Reno has been a consistent national leader in industrial rent growth in recent years, supported by its business-friendly environment, favorable regulations, pro-business tax climate and strategic location,” Pharris said. “We look forward to pursuing more opportunities in this market in the future.”
