NORTHERN NEVADA INDUSTRIAL REPORT. Sales Leases Construction Q Holcomb Ave., Ste Reno, Nevada DicksonCG.

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1 NORTHERN NEVADA INDUSTRIAL REPORT Sales Leases Construction Q Holcomb Ave., Ste Reno, Nevada DicksonCG.com

2 LEASING RECAP Leasing activity in the first quarter of 2018 was a touch slower compared to the powerful statistics posted throughout 2017 with 813,159 square feet of gross absorption, which was 25% lower than than the previous four quarters. With record low vacancies to start the year, the slight down tick in absorption was expected as tenants are being faced with many hurdles due to lack of supply, such as insufficient building specs and location restrictions for existing space. However, there was over 875,000 square feet of returning product by the end of the quarter and, topped with several new projects expected to come online throughout the year, all arrows point towards another exciting year for the Northern Nevada industrial market. AVERAGE BULK INDUSTRIAL LEASE RATE = $ 0.37 SF/MO NNN Gross Absorption 813,159 SF Net Absorption (63,502) SF The bulk of absorption for the quarter was accounted for in mid-box space with nine transactions in the 30,000-70,000 square foot range and seven transactions in the 10,000-20,000 square foot range. For bulk space, there were two lease transactions completed over 100,000 square feet, both of which landed in the North Valleys submarket. Dermody Properties signed international door manufacturer Masonite for a 223,824 square foot build-to-suit off Moya Blvd, and online HVAC/Plumbing supply company, SupplyHouse.com, leased 190,871 square feet at Panattoni s North Valleys Commerce Center. Other notable transactions were tire company, Bridgestone, leasing 65,088 square feet at GLP s 1450 E Greg St. in ; Dal-Tile leased one of the last remaining vacancies (38,576 sf) of the two new buildings at South Valley Commerce Center; and the cold storage fulfillment company, Crystal Creek Logistics, leased 33,750 square feet at 9250 Red Rock for the last remaining vacancy in that building. DCG represented Crystal Creek Logistics in the transaction. Written By: Vacancy Rate 3.03% JOEL FOUNTAIN BAKER KRUKOW jfountain@dicksoncg.com OFFICE CELL bkrukow@dicksoncg.com OFFICE CELL

3 Net Absorption Gross Absorption 1,355, ,100 1,178,582-63,502 Vacancy Rates 3.03%

4 SALES RECAP Industrial sales started the year off strong but limped into March with only one deal in the last month of quarter one. The largest purchase was GM s acquisition of their customer care and after-sales building in North Reno located at 6565 Echo Ave for $22,449,907 ($56 p/sf). The Submarket saw two mid-sized investment deals including AIC Ventures purchase of the 187,878 sf building at 550 Spice Islands Drive for $10,500,000 ($55.89 p/sf). The building was a sale leaseback with HC Ventures, a manufacturer of horticultural containers. Also in the Submarket, the Case Building at 1445 Glendale Ave, which included a 22,650 sf industrial/service building on 5.3 acres, sold for $5,800,000 to a 1031 buyer at a 6.3% cap rate. While overall number of sales was low, inquiries, tours, and interest in the area has remained hot leaving sellers rightfully optimistic for the upcoming 2nd quarter. Average deal size Q1 (under 10,000 sf): $128 p/sf Average deal size Q1 (over 10,000 sf): $ 92 p/sf TRANSACTION VOLUME $49,894,570 1ST QUARTER NEW CONSTRUCTION New construction in the region remains strong in 2018 with 739,000 square feet of newly completed buildings in the first quarter, and approximately 2,300,000 square feet of expected completions scheduled for the year. In North Valleys, Prologis completed their new 240,000 square foot building off Lear Blvd and Panattoni finished a 352,000 square foot building at their North Valleys Commerce Center; both spec buildings were 100% leased prior to completion. Local developer, Mckenzie Properties, also finished their 174,000 square foot build-to-suit for Elite Spice in South Reno. Dermody Properties is continuing to make progress with their new 436,000 square foot building at their Logisticenter at 395, while Panattoni broke ground on a new project in South Reno which will feature a 270,000 square foot building designed to accommodate both smaller 8,000 square foot flex tenants and larger mid to big box users. Both of these projects are expected to be online in the third quarter. With the demand for new industrial product remaining steady, and vacancies hitting all time lows, developers are continuing to tie up land and the hunt for available buildable parcels is getting tighter and tighter. Written By: JOEL FOUNTAIN BAKER KRUKOW jfountain@dicksoncg.com OFFICE CELL bkrukow@dicksoncg.com OFFICE CELL

5 N LEASES 4 SALES LEASES 1. Masonite Corp. Echo and Moya 223,824 sf (BTS -lease) 2. SupplyHouse.com 9460 N. Virginia St / NVCC 190,871 sf 3. Bridgestone 1450 E. Greg St. 65,088 sf 4. Dal-Tile South Reno 855 Sandhill (SVCC) 38,576 sf SALES Spice Islands Dr $10,500,000 ($55.89 p/sf) 187,878 sf Echo Ave $22,449,907 ($56 p/sf) 394,400 sf Glendale (Case Equipment) $5,800,000 (6.3% cap) 22,650 sf on 5.3 acres of land 5. Crystal Creek Logistics 9350 Red Rock Rd 33,750 sf