Western Real Estate Business

SEP 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

Issue link: https://westernrealestatebusiness.epubxp.com/i/1027244

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Page 72 of 82

70 • September 2018 • Western Real Estate Business www.REBusinessOnline.com DERMODY PROPERTIES BANKS ON ECOMMERCE REVOLUTION IN THE WEST The 58-year-old company continues to evolve to meet the West's most pressing industrial demands. By Nellie Day D ermody Properties was found- ed in Reno by John A. Dermody in 1960. Back then, the two-per- son team couldn't have possibly pre- dicted where the state of America's in- dustrial market would lead and how Dermody Properties would evolve, but it knew the company wouldn't be around to find out if it didn't establish some firm principles. That, first and foremost, included customer service. "Everyone says they have good cus- tomer service, but not everyone truly has good customer service," says Mi- chael C. Dermody, John Dermody's son who joined the privately held in- dustrial developer, owner and operator in 1972, bought the company from his father and other family members in 1990, and now serves as chairman and CEO. "We stay very much in touch with our customer after we complete the building. It's in our DNA, and is stated in our core values and mis- sion statement. We just aspire to be the best for our customers. That can range from a two-year warranty on construction to keeping promises you made for asset management." Whatever the firm is doing, it seems to be doing it right. Dermody Proper- ties has been extremely active lately, breaking ground and debuting specu- lative logistics-focused projects from Seattle to Las Vegas in the West, as well as across the nation. The com- pany continually seeks additional lo- gistics, distribution, ecommerce and manufacturing sites for development, as well as buildings for acquisition. Nevada Development While the company is active nation- wide, it is particularly involved out West, especially in its hometown of Reno, which Dermody considers to be the epicenter of the region in an era marked by the need for fast delivery. "Northern Nevada is important be- cause it is geographically the center of the Western U.S.," Dermody says. "Historically, it's where all the indus- try has come. They can serve Califor- nia, Oregon and Washington by doing business in Reno." Dermody further notes that Reno's industrial base is about 85 million square feet strong with a population of only 350,000, making it the nation's largest industrial base per capita. The senior Dermody couldn't have known the integral role Reno would play in today's ecommerce environment. His son, however, is quick to point out that although the ecommerce revolu- tion may still be taking shape, it's not unfamiliar to the company. "We became experts in internet ful- fillment and logistics properties in the middle of the recession in 2011," he says. "That's when Urban Outfitters built its flagship Internet fulfillment facility out West in Reno. We were for- tunate enough to get the business, and very quickly became well-versed on development for internet fulfillment." Urban Outfitters invested about $55 million in the region as Dermody and United Construction got to work developing, designing and building its 462,720-square-foot facility, which opened in September 2012. The facil- ity had been the largest private build- ing project completed in the state since early 2009. The project is situated on 38.3 acres at Dermody's LogistiCenter at Silver Lake. "The people in Reno have always made us feel as though they valued our business, even when our volume was substantially less," said Ken McKinney, former executive director of logistics for Urban Outfitters, at the grand opening celebration. "When we did an independent study in 2010 to determine the best site for a West- ern U.S. internet fulfillment center, Reno was the recommended location. Frankly, we were delighted with the final result, because for the past 14 years Reno has proven itself with its business-friendly environment and the excellent workforce we've been able to attract." Dermody shares McKinney's senti- ments for the region, which has led the firm to continually develop new spec product in the Northern Nevada area. "One of the biggest issues right now across the West is labor," he says. "We watch it very closely as it's a key part of the logistics mosaic. The best sites we sometimes find across the nation are where great labor, great real es- tate and great infrastructure come to- gether. We've been very active in Reno because our customers find there is a good labor force that lives nearby and provides excellent support." Since the firm's ecommerce evolu- tion, Dermody Properties has gone on to provide industrial space for compa- nies like Amazon, Wayfair, Walmart, Marmot, GameStop and Patagonia. Much of this space is in the North- ern Nevada region at developments like LogistiCenter at I-80 and Logisti- Center at 395. Both projects are part of the company's trademarked Logisti- Center portfolio, which represents the firm's philosophy of developing Class A distribution facilities that meet the supply chain requirements for the most innovative companies. These facilities are designed to meet best practices in sustainable design and construction, incorporating building features like additional clear height, as well as extra trailer and car park- ing that enable companies to execute their operations more effectively and efficiently. Dermody Properties recently started a new 436,368-square-foot building at LogistiCenter at 395, its 130-acre mas- ter-planned industrial business park in Reno. The new building will feature a 36-foot clear height and ample park- ing, including 378 car stalls and 203 trailer stalls, ecommerce ready. LogistiCenter at 395 is already home to Jarden Technical Apparel (Marmot) and Fosdick, which specializes in retail distribution and ecommerce and sub- scription retail fulfillment. The firm plans to develop a 405,456-square- foot building next year at the develop- ment. Forging New Ground Dermody Properties may be enthu- siastic about its hometown, but that doesn't mean the firm has hesitated to branch out across the nation early on. Aside from the Western U.S., it main- tains properties as far out as Penn- sylvania, Illinois and Texas. The firm is even entering new markets within other states in the West. Such is the case with the new LogistiCenter at Vacaville in Northern California. Der- mody is anticipated to break ground on the new 252,160-square-foot, Class A facility in Vacaville — the midpoint between the Bay Area and Sacramen- to region — in October. The 14-acre project is scheduled for completion next June. It will feature 36-foot clear heights and extra trailer and car park- ing to accommodate ecommerce com- panies. "Class-A buildings of this size with room for trailer storage are difficult to find and valued by both warehouse/ distribution and ecommerce users," said George Condon, West Region partner for Dermody Properties. "It is our first investment in the Solano County submarket, which we believe Dermody broke ground in April on LogistiCenter at Woodinville, a 409,500-square-foot, two-building industrial park east of Seattle. Dermody's first foray into ecommerce involved the development, design and construction of a 462,720-square-foot facility in Reno for Urban Outfitters, which opened in September 2012. Dermody

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