Although millions of square feet of new Class A industrial space has been added to the greater Reno area industrial market over the past decade — and much of that product has been leased to large companies taking down hundreds of thousands of square feet at a time — there’s been scant attention given to smaller light industrial tenants who need just a few thousand square feet for their business operations.
Private commercial real estate developer Herman Christensen & Sons of San Carlos, Calif., is changing the landscape for smaller flex industrial users with the development of Kiley Commerce Center in Spanish Springs. The development at the corners of Wingfield Hills and David Allen parkways consists of five buildings, three of which have already broken ground.
Two of the buildings under development are each 23,750 square feet, while the third is considerably larger at 67,500 square feet. The two smaller buildings will be subdivided into 20 total spaces of 2,375 square feet, while the larger building will be subdivided into 10 total spaces of 6,750 square feet. However, spaces can be combined to accommodate mid-sized businesses, said Gavin Christensen, president of Herman Christensen & Sons.
Each of the larger units will include a dock in the rear, while the smaller units will have drive-in capabilities with roll-up doors.
“We are targeting smaller users,” Christensen said. “We feel like that market has been a little underserved in Reno. There has been a lot of big distribution space built, but not a lot of space catering to smaller local businesses. We feel there is an opportunity to provide space for them.
“We have found from experience that it’s also hard to find docks on spaces in that size range,” he added.
Historically, smaller light industrial users had few options outside of leasing outdated Class B and class C industrial space in submarkets such as Sparks near the Truckee River or by the airport. Herman Christensen & Sons acquired nearly 35 acres in Spanish Springs several years ago with the goal of developing between 18 to 20 acres into modern light industrial that caters to local businesses.
Pat Morrissey of Morrissey Realty helped Herman Christensen & Sons acquire the land. Tomi Jo Lynch, first vice president of industrial properties at the Reno office of CBRE, will handle leasing for Kiley Commerce Center.
“With the number of rooftops in Spanish Springs there’s a need for this type of product,” Lynch said. “We will attract some users from Sparks who want to upgrade their space, but there’s really no fully planned business park like this in the area. All the industrial in the area is much larger, and we are filling a niche in the market that hasn’t been filled for a long time.
Tomi Jo Lynch
“There is a lot of older product in Reno and Sparks, and the demand on that product has remained really high,” Lynch added. “Occupancy also has remained relatively high in those spaces – especially in the newer buildings. It speaks volumes about the need for this type of product."
Christensen expects the tenant base at Kiley Commerce Center to be a mix of light industrial users such as assembly or manufacturing companies, smaller regional contractors and construction services firms, and professional office users who also need warehouse storage.
Kiley Commerce Center is the company’s first development play in Northern Nevada, but it has a long history of developing commercial real estate in the East Bay and San Francisco Peninsula regions. The company develops commercial real estate as a long-term investment, Christensen said.
Herman Christensen & Sons Greater Bay Area portfolio includes three light industrial parks and some research and development space totaling more than 1 million square feet. It also owns a few multifamily properties, Christensen said.
“We are long-term owners; we have no intention of selling,” he said. “We plan our product for the long haul. We don’t build it and spin it off, so we do try to design good assets for the long-term hold.”
Herman Christensen & Sons wanted to cast a slightly wider net outside of the expensive and overcrowded Bay Area market, and Reno was a logical choice for the company’s development capital, Christensen said.
“Geographically it's relatively close, its economy is booming, and we had contacts there. It was a natural (play) for us,” he said.
“It wasn’t easy to find land,” he added. “There’s not a lot of vacant land.”
Pinecrest Construction is the general contractor on the development. F and P Construction has almost completed mass grading for all five building pads at the site. The first three buildings are expected to come online in the spring.
The next phase of development calls for another 67,500 square-foot building, along with a smaller 28,500 square-foot building.
“We haven’t totally defined its use,” Christensen said. “It depends on absorption and what kind of market demand we see.”
Randy Pitts, owner of F & P Construction in Reno, NV, is no stranger to the challenges of mass excavation. His current project in the Tahoe-Reno Industrial Center called for moving more than a half-million yards of rocky soil to prepare a pad for a 703,000 square-foot warehouse. Pitts needed to break through about six feet of sun-baked hardpan and deal with many large boulders and cobble embedded in the soil. At 104,000 acres, the Center is one of the world’s largest industrial parks. F & P Construction has been working here since 2005, building roads and railroad beds, digging sewer and water trenches, and preparing sites for new buildings.
Initially, Pitts relied on a dozer/wheel loader combo for moving material, with the dozer pushing materials to a wheel loader that would then load six articulated trucks. This was effective, but Pitts aimed to increase his productivity by adding a mass excavation unit to the site. To do so, he brought in the 463-horsepower, 153,400-pound CX700B from CASE Construction Equipment—an excavator with a 5.91-cubic-yard bucket dedicated to mass excavation. The overall speed and power of the machine has allowed Pitts to increase his productivity by 46%—and to do so without adding any additional equipment.
“The CASE excavator is a one-man machine that can dig and load. So I have an excavator operator and a truck driver compared to a three-man operation for dozer, loader, and truck,” explains Pitts. “Before we bought the CASE CX700B, we moved around 7,500 yards a day. With the new excavator that jumped to 11,000 yards. I could use my current fleet of trucks, [and] I could fill them up a lot faster.”
Pitts considered a variety of excavators for the project, but decided the CASE CX700B presented to him by Sonsray Machinery of Sparks, NV, would provide the right combination of performance and cost. “Price is one part of it, financing, weight class was a big part of it. I knew I wanted a good, heavy strong machine.”
“It’s all about volume,” he continues. “The bigger the machine, the bigger the bucket. But we’re also very impressed with the cycle times. It’s a really fast swinging machine and the faster you swing, the faster you load your trucks. I’d bet it’s about 15 to 20% faster than other excavators we’ve used.”
Speed and power are hallmarks of the CX700B thanks to a combination of hydraulics and engine power, which also helps improve fuel efficiency (calculated in mass excavation applications by yards of material moved per gallon of fuel). The CX700B gives the operator complete control over engine output and hydraulic power through three operation modes, which optimizes engine output to meet the application demands. Features such as regenerative hydraulics on the boom, arm, and bucket, and large-diameter hydraulic cylinders provide everything from increased breakout forces to the faster cycle times that have helped contribute to the increase in productivity.
Pitts’ son Dayton is the field superintendent on the Tahoe-Reno Industrial Center project. Like his father, Dayton is impressed with the cycle times of the CASE CX700B. “You know, the biggest eye opener is the speed for such a large excavator. It cycles very fast. We’ve had it next to other machines and it beat them hands down.”
F & P Construction matched the excavator with three 40-ton articulated trucks. Rather than adding additional trucks, the company simply split its existing fleet of six between the wheel loader/dozer combo and the CX700B. This allowed the company to more efficiently cycle its trucks throughout the site and increase its production by 3,500 yards-per-day without adding new trucks or drivers—a significant increase in production without an excessive addition of equipment.
Besides high capacity and faster cycle times, the machine has also proven easy to operate. The large climate-controlled cab provides ample space and comfort for the operator. And the ability to flip control patterns (through an optional control pattern selector valve) allowed the company’s primary operator to run the new excavator without a learning curve.
“Our operator couldn’t run the one hydraulic pattern—he ran an opposite pattern,” says Randy Pitts. “The idea was to flip the controls over to the other type of a pattern that he could operate. It made a big difference to where he could run it. I know machines on a job that he can’t run because they don’t have the ability to flip their hydraulic pattern.”
The relationship with Sonsray Machinery was also an important part of the equation. Randy Pitts has been buying CASE equipment since he started his business, but had not bought anything the size of the CX700B.
“I’ve always been a CASE backhoe guy,” he says. “I’ve always owned a lot of CASE backhoes and 570s and a couple of loaders. I’ve owned a small CASE dozer at one time. I’ve dealt with CASE and Sonsray for the last 23 years. This is the first time that I’ve ever got a machine this size from Sonsray—they’re bringing the larger CASE machines to town.”
Dayton Pitts is glad they did. “I thought, wow, I didn’t know CASE made anything that big, so I had to play with it—compare it to the other big excavators. It was very impressive.” He adds, “With all these rocks, we still haven’t found anything that can stop the CX700B. It pulled out some really big boulders that stopped other big excavators.”
Pitts’ crew had 10 weeks to complete the main excavation of the site. They did it in six. But they weren’t done there:
“We’ll put on a smaller bucket to dig and install 20-foot deep sewer lines and 15-foot deep storing drains,” says Randy Pitts. “When you have to set 36-inch pipe and drag shields, a big machine like the CX700B really makes a difference.”
“Our real forte is mass grading,” concludes Pitts. “With my mining background, I’ve learned to move dirt and materials fast and [with precision]. To do that out here you need big excavators, big loaders and big haul trucks.”
“Once we got the CX700B out here, our production rate really picked up.”
Philippe Bisson is the brand marketing manager for CASE Construction Equipment.
