RENO, Nev. — This year, the city of Reno celebrates its 150th anniversary. With that in mind, the Northern Nevada Business Weekly spoke with a few long-standing companies that have been doing business for decades in and around the Reno area.
One such company is McKenzie Properties, which is celebrating its 65th anniversary in Reno. A family-owned company, McKenzie Properties has built multiple schools, downtown buildings like Circus Circus Reno, buildings at the University of Nevada, Reno, and much more. In all, McKenzie Properties has built over $1 billion in projects.
The NNBW recently sat down with Todd McKenzie, principal of McKenzie Properties, to talk about the past, present and future of business in and around the Biggest Little City.
NNBW: How long have you guys been doing business in Reno?
Todd McKenzie: Sixty-five years this year. We started in 1953. My grandpa started it as a construction company — McKenzie Construction. He just built for other folks. And then in the ’70s and ’80s, we kind of started morphing to just building for ourselves, and that’s what we do today. We buy land or buy a building, and build something; lease it out, manage it and own it for the long term.
NNBW: How long have you been with the company?
McKenzie: I’ve been here 13 years.
NNBW: How have you seen the city of Reno evolve?
McKenzie: It’s way more balanced. When I started in 2005, we were still kind of on an upward trajectory, but the economy was still declining from gaming. That decline had started, but at the time, I think 25 percent of our workforce was construction-related. And if you get a hiccup in the economy, which we did, and that goes away, which it did, that’s a huge hit to the economy. So I think now as we’re coming back, it’s just more balanced. Coming out of the recession, we’re seeing a lot more of the three major sectors coming: technology, healthcare and finance. More and more of those jobs are coming into the area, whereas 40 years ago, 80 percent of the economy was gaming-related.
So it’s just more balanced and more of an entrepreneurial town. And obviously with all the big companies — Tesla, and Google, and all of those folks coming — it’s just a more broad, balanced economy. And more sustainable, too.
NNBW: What’s the biggest change you’ve seen in the building industry the last few decades?
McKenzie: The biggest change is probably the prices. The more challenging aspect of building is land prices are way up and building costs are way up right now, so it’s more difficult. I think probably the biggest change from when I started to now is the availability of the lending environment. Banks are a lot more restrictive; it’s harder to get construction financing. We used to be able to just get a loan and build a building with no tenants, no big deal — we’ll just fill it up and worry about it later. And banks would lend on that. Now, not so much.
NNBW: What are some of the biggest challenges the building industry faces right now?
McKenzie: Costs. It’s just the simple equation of land costs and building costs equals what it costs to build. Whatever it is — industrial, office, retail — those are all skyrocketing. Lumber is absolutely going off the charts, I think steel is up 30 percent in the last couple of years, and land prices are really high, which affects everything. So that is the biggest challenge because rents are just not quite where they need to be on the commercial side for office development.
We need more office development here. If you take a look at the existing Class A inventory, I think there’s roughly 350,000 square feet of Class A inventory. If we had roughly 1,200 new jobs that would all be wiped out. Our total inventory—so A, B and C — is 800,000 square feet, I think. That’s a little over 3,000 new jobs, and it’s all wiped out. So the need for Class A office product is coming. But the rents aren’t quite there to motivate people to build on the scale that we need to be building because there’s a disconnect on rental rates and costs.
NNBW: What’s the biggest challenge facing Reno and Northern Nevada as a whole when it comes to the economy?
McKenzie: Infrastructure, for sure. Just keeping up with schools and healthcare and the roads and just everything needed to sustain and support population growth.
NNBW: How do you think city officials and community players should tackle the housing issue to set up the region for success decades down the road?
McKenzie: Well, if there’s a demand, the supply is going to meet it. I think right now homebuilders and multi-family builders are finding a way to address the housing needs the best they can. I think from a planning perspective, they have been doing a lot with the (City of Reno) master plan and working with developers in opening up new areas to build.
I think just the continuation of working as a partnership to address the needs is how we need to go going forward. No one person can wave a magic wand. It’s such a complex beast, and there’s so many different areas, we’ve just all got to be smart about it in planning and what we build, and focusing on some more density, as well. And I’d love to see more building downtown, which isn’t happening, but that’d be nice.
NNBW: What makes Reno-Sparks, Northern Nevada such a great area to do business?
McKenzie: Obviously the tax-advantages, the business-friendly climate, the can-do attitude … there are just amazing talented people here that want to work together and want to collaborate on great new ideas. The spirit of the community here is just phenomenal.
Editor’s Note: This interview has been edited and condensed for clarity.
See article by clicking here.

Northern Nevada is growing quickly and many companies moving here are looking for new, 2017 Class A office space. Class A office space represents the newest buildings in the market, with the highest quality construction, finishes and infrastructure.  Tenant benefits associated with class A buildings include that they are conveniently located, have good access, and are professionally managed. Because of the higher end advantages, class A buildings attract high quality tenants and also remain in the top tier of rental rates. Reno is experiencing a shortage in class A office space and an increase in new speculative office buildings are needed to accommodate the many businesses looking to call northern Nevada home.
Mountain View Corporate Center is the first speculative office building to break ground since 2008. The building has customized floor plans, generous tenant improvement allowances, balconies and much more. Mountain View Corporate Center is centrally located, with many amenities offered nearby.  There are 78 restaurants and drinking establishments within a 5-minute drive, making client work meetings and luncheons very convenient.  Mountain View Corporate Center offers access to nearby hotels, shopping and easy freeway access. We are looking forward to accommodating our tenants with a luxurious view and welcoming feeling.
Although the market shows we will continue to see a shortage of Class A office space into mid-2017, our goal is to remain strong and to continue to be attentive and accommodating to our current and future tenants needs and maintain successful relationships. We also look forward to growing and developing more spaces as the northern Nevada market continues to thrive.
This article discusses fluctuation of our local market and the short supply of Class A lease space.   Take a look here.
http://www.nnbw.com/news/real-estate/reno-office-market-on-slow-steady-climb/

We are pleased to announce we have broken ground on 5520 Kietzke Lane. This is the first speculative office project to be built since 2008. More details to come!

In September 2016, McKenzie Properties broke ground on two speculative industrial buildings located at 925 and 945 North Hills Boulevard in the Golden Valley Industrial Complex. The new buildings are 85,000 square feet and 62,000 square feet. Both buildings will feature modern upgrades and finishes. The structures are Class A tilt up construction. The projects are on pace for the spring 2017 completion date and are ready for the tilt portion of the construction process.
Tilt-up construction is a method often used because it can be more cost effective and offers a shorter completion time. Tilt-up construction method involves pouring and forming all the concrete elements of the building on the project site. This can include everything from walls to columns. Once the concrete has cured, the walls are tilted up vertically into position using cranes. The walls are braced in place until the rest of the building elements are manufactured.
For tilt up construction to be efficient, a lot of planning is required. First the pad or foundation must be poured and cured. Once that is completed, the walls are poured one by one, on top of each other. Each wall is formed in casts or forms. The forms are often made of plywood, but can also be made from aluminum or steel. The form is specific to each wall, including doors, windows and any other architectural components that are needed for the design of the building. A chemically reactive bondbreaker is sprayed between each layer to keep the layers from clinging together. This step is crucial to the success of the building. If the layers bond together, they must be dismantled and poured again. This can not only be a costly mistake financially, but also can greatly affect the completion date of the project. After the walls have been tilted into position, they are secured onto the foundation and braces are used to hold them in place. The braces are removed after the structural steel and roof are in place.
The new buildings at Golden Valley Industrial Complex are in a prime location, only .7 miles from Highway 395. The buildings both have a thirty-foot clear height, making them ideal for manufacturing and distribution centers. Both buildings will be outfitted with metal roofing, consistent with food grade facilities. For more information please call McKenzie Properties at 775-329-5181.

Northern Nevada continues to recover and expand and we are excited to continue to be apart of it. We will be breaking ground on the newest addition to the Mountain View Corporate Center in spring of 2017. Expected delivery is Q4 2017. The new building is a 40,826 square feet Class A office space with four stories. The third and fourth floors will be completed with two balconies and the building will feature high end finishes. McKenzie Construction is the builder for the project and the architect is Tectonics. This is the first speculative office building to break ground in northern Nevada since 2008. 
McKenzie Properties acquired the land in February 2015. The purchase included 5470 Kietzke Lane and the adjoining 5-acre parcel. The existing building has three stories and totals 56,589 square feet of Class A office space located on a 3.37 acre parcel.
Mountain View Corporate Center is a 30-acre, master-planned business park situated between Evans Creek and Anderson Park in South Reno. Mountain View Corporate Center is home to a variety of businesses, such as Holland & Hart, HD Retina Eye Center, City National Bank and Sun West Bank. The new building will soon be home to similar businesses, part of a thriving commercial community in the Kietzke area. The Meadowood submarket continues to have great demand and the Kietzke Lane corridor is particularly strong.

As industries continue to grow, we continue to accommodate those needs. Read more here about our newest construction scheduled to be complete spring of 2017. http://www.nnbw.com/news/news-briefs/week-of-september-30/

We have updated our office building at 245 E Liberty St. The remodel included exterior upgrades, redesign of interior common areas and new lobby. Stop by and take a look!

Available office space remains scarce in the South Meadows submarket but there is still space available. This is a great article on the differences in activity in industrial vs. office in that area. Take a look here.
 

Take a look at this recent article from the RGJ to see how trends in retail, industrial and office markets are swaying what you can expect to see in 2016. Click here to read more.

Total vacancy in the South Meadows office market was 15.7 percent in the first quarter of 2016, which is half of what it was during the recession. Read more here.