Reno Industrial Market to Welcome 1.5 MSF of New Space

Majestic Reno Commercenter. Image courtesy of Majestic Realty Co.

With Majestic Reno Commercenter I, a two-building project totaling roughly 515,200 square feet, having already received a robust response, Majestic Realty Co. is moving full speed ahead with two more speculative developments, Majestic Reno Commercenter II and III, which will yield an additional 939,100 square feet. Upon completion, MRC I, II and III will have added a total of nearly 1.5 million square feet of premier industrial to Reno’s hungry market.

Located adjacent to MRC I, MRC II will be home to Building 3 and will carry the address of 9515 N. Virginia St., near Interstate 395 and roughly 12 miles north of Reno-Tahoe International Airport. Sited on nearly 20 acres, Building 3 will encompass approximately 246,400 square feet and offer such coveted features as a 36-foot clear height, 41 dock doors, two drive-in doors, a 185-foot truck court, as well as ample auto and trailer parking.

Majestic is erecting MRC III on a nearly 37-acre site roughly 28 miles east of MRC I and II in McCarran, Nev. The project, located at 150 Milan Drive, will yield a 692,700-square-foot facility with a 36-foot clear height, 119 dock doors, six drive-in doors and a 185-foot truck court, in addition to ample auto and trailer parking. MRC III also features 5 acres of excess land to accommodate overflow parking or additional expansion.

Inventory drought in the desert

With annual net absorption having surpassed newly delivered product in 2020 and 2021, Reno’s industrial market has been quietly but consistently tightening over the years to the point where the regional vacancy rate dropped to its lowest level ever in the second quarter of 2022, a mere 0.6 percent, according to a report by Colliers.

New developments, like Majestic’s MRC projects, attempt to help fill the void in options; however, eager users often claim space before completion. Majestic’s MRC I is fully preleased to two tenants each, in Building 1 at 9499 N. Virginia and Building 2 at 9477 N. Virginia. Majestic isn’t naming names, but the four users who claimed all the space at MRC I include an international pet food manufacturer, a transportation and logistics company, a global locomotive, freight and passenger vehicle product manufacturer and a leading construction and portable power equipment manufacturer.

MRC II and III are already under construction and scheduled to deliver in early 2023 and the fourth quarter of 2022, respectively. MRC I is also on track to deliver in the fourth quarter of 2022. With the completion of MRC I, II and III, a total of 1.5 million square feet will have been added to the Reno industrial market. All market indicators suggest that the MRC projects that haven’t already been claimed will find tenants in advance of their completion. “Industrial rents continue to climb as available space dries up each quarter. While new deliveries will provide some relief to surging demand, vacancy will likely hover around 1 percent in the near future,” according to the Colliers report.

Majestic isn’t just keeping busy in Reno, however. Under the guidance of recently named CEO, 25-year board member Reon Roski, the Southern California-based company—the largest privately held developer and owner of master-planned business parks in the U.S.—continues to busy itself providing accommodations for users in the nation’s industrial-starved market. Most recently, Majestic revealed that along with partner Sunroad Enterprises, it has commenced construction on two new spec buildings at its 67-acre Landmark at Otay development in San Diego.