Locus Development Group’s speculative industrial building at Comstock Commerce Center inside Tahoe Reno Industrial Center is scheduled for delivery in the fourth quarter of this year.
Locus Development Group purchased the land for the 850-acre advanced manufacturing and logistics park in 2017. At the time, Comstock Commerce Center was an outlier – the bulk of new industrial development was still happening to the north within the primary footprint of TRI Center, and the crucial 12-mile extension connecting USA Parkway to Highway 50 was still roughly five years away.
Today, Comstock Commerce Center is in the heart of the path of future development at TRI Center as the enormous industrial park expands from its roots and new development pushes south on USA Parkway toward Highway 50.
Joel Grace, chief executive officer with Locus Development Group, told NNBW that Google was the only company in the general vicinity when it acquired the land.
“Our investors had the foresight to take down the amount of property that they did, which was a big purchase at over 800 acres,” Grace said. “Now we are starting to see the path of progress in the south valley all the way to the Lion County line.”
Battery recycler Redwood Materials took the entirety of Comstock Commerce Center’s position on the west side of USA Parkway, while Microsoft purchased land on the east side that originally was scheduled for four industrial buildings totaling more than 2.5 million square feet.
Locus Development Group sold its first completed building at Comstock Commerce Center to Redwood Materials. In addition to the 1.4 million-square-foot facility, Redwood Materials occupies two additional buildings of 670,000 and 815,000 square feet. It also has short-term leases with Locus Development Group on two adjacent pad-ready sites where it stores feedstock for its battery recycling operations. The pads are slated for 531,000 square feet of new industrial space across two buildings.
“We will eventually build something there, but Redwood is a great tenant, and we want to do what we can to help them out,” Grace said.
Microsoft has yet to make improvements on its land at Comstock Commerce Center, which was originally planned for 2.5 million square feet of industrial development over four buildings. Microsoft purchased an additional 300 acres of land at Victory Logistics District in Fernley in April.
Joel Grace
Grace said Locus Development Group had three size options for its spec building but chose the middle ground. General contractor Metcalf Builders went vertical in April on a 474,934-square-foot facility that’s expected to be delivered in the fourth quarter of this year. The building will have 36-foot clear heights and parking for 228 vehicles, including parking for 41 semitractor trailers. The facility was designed by Tectonics Design Group, with engineering by Kimley-Horn. Capriati Construction Corp., was the subcontractor for the grading work.
Grace said Locus Development Group worked closely with regional industrial brokers to meet the current demands of the market. Mike Nevis and Shawn Jaenson of Cushman & Wakefield are the brokers of record for Comstock Commerce Center.
“We worked in tandem with the brokerage community to understand the needs of tenants and preplan what is currently in the market, competition, and what the future holds for those specific-sized buildings,” Grace said.
Locus Development Group could have erected a massive 815,360-square-foot building that’s a sister facility to the one that was sold to Redwood Materials, or gone with a smaller facility of 338,240 square-feet. With the market recording positive net absorption of roughly 1.2 million square feet for the first six months of the year, and a glut of smaller-sized industrial facilities flooding the market, the decision was made to go with the 475,000 square-foot facility.
“When we started this building, the 300,000-square-foot-and-under market had quite a bit of availability with second-gen product coming back to the market,” Grace said. “There are deals being done, so our investors make a decision, with the guidance of the brokerage community, that 475,000 square feet is the best market to be in given that there will only be a few buildings of that size available when it will be delivered.”
A primary benefit of developing the building is that all the infrastructure necessary for future vertical development on two adjacent pad-ready sites will be in place, Grace added.
“It is also an infrastructure play – we want to make sure that when we are ready to go on those next two sites that everything is in place and we don’t have any holdups. As soon as we get a lease on this building, we will be making a decision on which building we are going to build next based on what the market will bear and where activity is for those two sites.
“We will have an advantage because we will have the road in, as well as all the major utility trunk lines, laterals and extensions for those next two buildings,” he added. “From there we just need to decide which building the market is dictating.”
Grace said the speculative building has already drawn interest from a handful of prospective tenants via requests for proposals and requests for information. Although the potential ramifications of tariffs put a damper on new industrial leasing across the state, site tours and leasing activity has been picking up – especially in Southern Nevada – and clarity on the impact of tariffs will dictate leasing activity across the Northern Nevada industrial market, Grace said.
“There’s a lot going on between interest rates, tenant decisions, technology and tariffs, but we make the best decisions we can in trying to predict the market,” he said. “As we get stability and understanding of what tariffs mean and a finality on what that environment looks like, we will have more information to make decisions. That is where we will see more positivity in the leasing environment.
“TRIC is a great place for a company that wants to move fast,” he added. “Decisions for tenants are usually a year or more out – there is a lot of planning and logistics that go into it. But we are in a good spot in the path of progress, and we are ready to build on our two additional sites.”
