Per Toles, CEO of Toles Development in Reno, recently told Nevada Newsmakers that the development and real estate industry is moving a little slow.
Conventional wisdom says it has to do with anxious anticipation of the next election.
“Everyone says that,” Toles told host Sam Shad.
However, other factors are more important.
“I think it’s the interest rate,” Toles said.
The Fed cut the key federal funds rate in September, lowering it from a range of 5.25% to 5.5% to a range of 4.75% to 5%, according to the business news website.
This was the first interest rate cut since 2020 during the coronavirus pandemic. Several published reports also mention the possibility of two more cuts before the end of the year.
“We just had a rate cut, and a lot of businesses are waiting, ‘When are we going to be able to take on debt that will allow us to grow?’ And we know there’s going to be two more[rate cuts],” Tolles said. he said. Said. “That’s the forecast, at least for now. So I think it’s more of an ‘economic wait’ than anything else.”
Mr. Toles questioned the historical significance of elections and real estate.
“Everyone always blames (the economic slowdown) on elections, but from a real estate perspective, if you look at the last 20 years, there hasn’t been a meaningful change in real estate based on election years.”
However, he added that some companies could be significantly affected by the election.
“For some companies, perhaps if there is legislation on environmental issues and companies think that their sector will be promoted if one side is elected, they will probably wait.
“So while there may be (election factors) for some companies, I think it’s more of an economic reason,” Toles said.
However, Tolls’ performance has not slowed down. He spoke about four Tolls development projects (three in Reno and one in Southern Nevada) that have achieved significant milestones. Logistics and location are advantages for everyone. Consider:
Hyatt South Reno: The 132-room Hyatt Place South Reno opened earlier this month near Summit Mall on Mount Rose Highway. This location appeals to both leisure and business travelers.
“It’s the southernmost hotel in Reno, the closest to Carson City and the closest to Lake Tahoe,” Toles said. “From a business travel standpoint, it’s going to be a great hotel because it has all the amenities, like the Summit Mall, the restaurants, the Apple Store. And I think it’s going to be the Lake Tahoe Refugee Hotel. You know, the Tahoe Lakes have become very expensive.
“It’s really hard for the middle class to enjoy that. Then you’re 25 minutes from the Incline (village).”
The recent opening marks the end of a four-year journey from start to finish for the Hyatt project, Toles said.
“For those who aren’t familiar, we started opening the hotel before COVID-19 and we were very nervous a week after breaking ground,” Toles said. spoke. “I had GFC (Global Financial Crisis Disorder), probably PTSD (Post Traumatic Stress Disorder). It’s a lot of acronyms, but we shut it down. So we… We waited until the coronavirus was over and then started reopening.” ”
Airways Commerce Center: Tolls’ 900,000 square foot employment hub includes office, warehouse distribution, light industrial and showroom space for lease.
“I think it’s the best located industrial park in the city,” Toles said.
The Airway Commerce Center is located just south of the airport in the former Home Gardens area, according to the Reno Gazette Journal. Tolls plans to lease the land from the Reno-Tahoe Airport Authority.
“We worked very well with the airport and just completed it,” Toles said. “And we’re in the lease-up stage. So leasing is a little bit behind. Nationally, we’re behind. So far we’re about 20 percent leased and we’re bringing in some good tenants. ”
“It’s well-located, attractive and ideal for overnight logistics,” he said. “And we couldn’t build anything else there because of the proximity to the runway. There were population restrictions and height restrictions. Everything was done in parallel with the airport development, and we partnered with the airport to We found the right time to build.”
Crossing the University: Toles said his company recently completed an 8,000-square-foot building next to The Row in downtown Reno. The building is six contiguous blocks in downtown Reno, integrating the El Dorado Resort Casino, Circus Circus Reno, and Silver Legacy Resort Casino. It was soon leased to four restaurants to serve the growing student market as the University of Nevada continues its expansion into downtown.
“We’ll be able to serve the university, more fast food, Jimmy John’s, Teriyaki Madness, etc. But it showed that there’s a demand downtown as well. And the university will be able to ( “I think it’s going to continue to push for redevelopment of downtown as we inch past I-80.”
Gene warehouse and distribution center: Perhaps Tolls’ biggest project is building a 1.9 million-square-foot warehouse and distribution center near Gene, a small town in southern Nevada. Construction on the first building is scheduled to begin in November.
“We think we’re holding the tiger by the tail,” Toles said in a 2023 interview with Nevada Newsmakers.
The property is 54 miles from the Las Vegas Strip and 21 miles from the California border. It incorporates the infrastructure of the former Gold Strike Hotel Casino and could be an ideal location for shipping, receiving, manufacturing and storing all types of products and cargo. Railroads and interstates run next to it, and Jean has a small airport.
“We’re definitely going to be the southernmost industrial submarket in Las Vegas,” he said. “Again, this will allow trucks to come from the Port of Long Beach to Gene, circle around and come back the same day. So (this) will eliminate all the truck traffic congestion. -15, next to the Strip, on the way to North Las Vegas. ”
Toles was referring to a rule for truck drivers to drive for up to 11 hours in a 24-hour period, followed by a 10-hour break. By dropping off at Gene, truck drivers can turn around and return home instead of enduring the required overnight break in the Las Vegas area before being allowed to return home.
“Our theme is, if we can build a substantial submarket that can attract a railroad, and Union Pacific is excited about our project, the railroad runs right through the middle of it. If we can get the traffic, we’ll be able to have truck traffic.” Gene and I won’t have to go all the way to North Las Vegas, and that will serve the market well from an environmental standpoint and from a congestion standpoint. ”
Toles sees Gene’s real estate as a way to help diversify the Las Vegas economy, which currently relies heavily on tourism and gaming.
“We want to continue to diversify Las Vegas,” he said. “We’re seeing an increase in manufacturing numbers and skilled manufacturing in Las Vegas. I’d say 25% is still gaming-related, but there’s a lot of other stuff. And I’m very excited about the diversification of Las Vegas. I’m excited. And I think we can really facilitate that, from the edge of Las Vegas all the way to the state line. ”
