Mohr Capital plans Fernley, Reno projects to start 2023

Mohr Capital recently completed work on a 596,400-square-foot Class A industrial facility on 46 acres at Tahoe Reno Industrial Center.

Mohr Capital recently completed work on a 596,400-square-foot Class A industrial facility on 46 acres at Tahoe Reno Industrial Center.

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Rising interest rates, increased borrowing costs, and the threat of a national recession did little to slow Mohr Capital’s first speculative industrial building in Northern Nevada.

Privately owned Mohr Capital, headquartered at Dallas, recently completed work on a 596,400-square-foot Class A industrial facility on 46 acres at Tahoe Reno Industrial Center. Not only was the building fully leased to Omni Cable and JT Logistics before it was completed, but it was sold while under construction as well, said Tom Theobald, senior vice president of development for Mohr Capital.

Theobald said Reno had been on the company’s list as a target market for quite some time, and the company purchased 46 acres at 1500 Waltham Way in early 2021. General contractor ARCO Murray Construction Co., of Chicago broke ground on the project last fall and completed the facility in September.

“Reno is exploding from an industrial standpoint,” Theobald told NNBW during a video interview. “The growth in the market is just phenomenal.”

Greg Shutt, senior vice president of advisory and transaction services for the Reno office of CBRE, was the lead leasing agent for the facility while it was being built. Brett Hartzell, a Seattle-based vice chairman with CBRE’s national partners group, led the sale transaction. Dalfen Industrial of Dallas, a Dallas-based real estate investment firm that focuses on industrial real estate, was the buyer.

Theobald said Mohr Capital plans to begin additional projects in North Valleys and Fernley in the first quarter of 2023. The company is bullish on Northern Nevada due in part to its proximity to western-region markets and favorable business climate that continues to draw in new businesses, he added.

“From Reno you can reach 60 million of the U.S. population within a day’s drive,” Theobald said. “That’s one of the things that’s driving the industrial growth – particularly distribution growth – in the Reno market.

“Couple that with the high cost of doing business in California, and it makes it a pretty easy decision for a lot of companies to locate in the Reno area.”

The North Valleys project is located on 14 acres off North Virginia Street near Stead Boulevard. The company plans to build a 179,000-square foot distribution/light industrial building. Mohr Capital has not selected a general contractor for the facility. The building should be delivered in the first quarter of 2024, Theobald said.

The 27-acre site in Fernley is located at 1000 Pilot Road and is scheduled to be a 447,000 square-foot cross dock distribution building. Industrial design-builder FCL Builders of Itasca, Ill., is the general contractor for that facility and should deliver the facility in one-year’s time.

Eric Bennett, senior vice president of the industrial team at CBRE, is the leasing agent for the Fernley industrial project, while Kyle Eigenman of Primary Commercial Real Estate will handle leasing at the North Valleys facility.

Theobald said that rising interest rates and increased borrowing costs haven’t affected Mohr Capital due to its existing relationships with capital partners.

“The biggest challenge the development community has is finding affordable construction debt,” he said. “The construction lending environment has changed pretty dramatically. We are using some existing banking relationships that Mohr Capital has in order to obtain the construction loans we need to move forward on these projects.

“It is different terms than what we were accustomed to a year or more ago, but they are workable terms,” he added. “We think the construction lending market will start to re-engage on a much broader level sometime in 2023, but we have a couple of good lender relationships we are utilizing for these projects.”

Theobald said the main challenges associated with developing two speculative buildings concurrently will be managing steep increases in building costs. However, he added, the strong leasing activity seen in the Northern Nevada industrial market, as well as incredibly low sub-1 percent vacancy rate in new Class A industrial buildings, supports a speculative development strategy.

“We expect these buildings to lease fairly quickly,” Theobald said. “One of the motivating factors to do these projects right now is the sub-1 percent vacancy rate in the industrial market in Reno – that’s unique across the country. It’s as close to zero as you can get.”

Mohr Capital is expanding its western-region footprint with two additional industrial projects in Phoenix totaling 700,000 square feet, and it’s preparing to develop an industrial facility in Denver as well.


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