Retailers Change Tactics NAIOP P25 Special Report

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NV Business Full Bleed.indd 2 4/1/17 5:42 PM The Commentary Thanksgiving’s True Origins VOLUME 32 • NO. 11 It’s Not About Pilgrims and Indians A division of Business Link, LLC PUBLISHER Most Americans are taught in grade school that Thanksgiving is about pilgrims Lyle E. Brennan • [email protected] landing on our shores and Indians sharing their bounty. However, Thanksgiving was PUBLISHER / CEO not a holiday and we didn’t start celebrating until many years later when President Connie Brennan • [email protected] Abraham Lincoln made the following proclamation during the Civil War. EDITOR-IN-CHIEF Tarah Richardson • [email protected] ART DIRECTOR Thanksgiving Proclamation Chris Tucker • [email protected] It is the duty of nations as well as of men to own their dependence upon the WEB EDITOR / ONLINE MARKETING overruling power of God: to confess their sins and transgressions in humble Ben Rowley • [email protected] sorrow, yet with assured hope that genuine repentance will lead to mercy and ASSOCIATE EDITOR pardon; and to recognize the sublime truth, announced in the Holy Scriptures Donna Greene • [email protected] and proven by all history, that those nations are blessed who’s God is the Lord. SENIOR ACCOUNT EXECUTIVE LaShawn Guidry • [email protected] We know that by His divine law, nations, like individuals, are subjected to punishments and chastisements in this world. May we not justly fear that the CHIEF EXECUTIVE ADMINISTRATOR Tavia Harter • [email protected] awful calamity of civil war which now desolates the land may be a punishment SALES ASSOCIATE inflicted upon us for our presumptuous sins, to the needful end of our national Angelica Nance • [email protected] reformation as a whole people? CIRCULATION MANAGER We have been the recipients of the choicest bounties of heaven; we have Courtney Venable • [email protected] been preserved these many years in peace and prosperity; we have grown in CONTRIBUTING WRITERS numbers, wealth and power as no other nation has ever grown. Doresa Banning • Jennifer Rachel Baumer Don Hamrick • Michael Schaus • Scott Seastrand But we have forgotten God. We have forgotten the gracious hand which preserved us in peace and multiplied and enriched and strengthen us, and we RESEARCH / RANKING NEVADA have vainly imagined, in the deceitfulness of our hearts, that all these blessings [email protected] were produced by some superior wisdom and virtue of our own. Intoxicated with SUBSCRIPTIONS unbroken success, we have become too self sufficient to feel the necessity of [email protected] redeeming and preserving grace, too proud to pray to the God that made us. NORTHERN NEVADA ADVISORY BOARD Tom Clark • Tom Clark Solutions It has seemed to me fit and proper that God should be solemnly, reverently, and Lee Gibson • Regional Transportation Commission gratefully acknowledged, as with one heart and one voice, by the whole American Valerie Glenn • The Glenn Group Rick Gray • Fallon Convention and Tourism Authority people. I do therefore invite my fellow citizens in every part of the United States, Rob Hooper • Northern Nevada Development Authority and also those who are at sea and those sojourning in foreign lands, to set apart Mike Kazmierski • Economic Development Authority of Western Nevada and observe the last Thursday of November as a day of Thanksgiving and praise to Marily Mora • Reno-Tahoe International Airport our beneficent Father who dwelleth in the heavens. CORPORATE OFFICE —Abraham Lincoln 375 N. Stephanie St., Suite 2211 • Henderson, NV 89014 P (702) 735-7003 • F (702) 733-5953 Reno: P (775) 583-8113 I invite you to do as our family does and incorporate the reading of this proclamation into your holiday feast. I’m always reminded that the President’s words are just as relevant in these turbulent times as they were when his proc- Web Site: www.nevadabusiness.com Mobile: Download QR Reader and scan. lamation was written. As you celebrate Thanksgiving, I hope you take a moment to remember to whom we owe thanks. Happy Thanksgiving, everyone.

Nevada Business Journal, Nevada Business Magazine and Nevada Business are divisions 2 Chronicles 7:14 (NKJV) “If my people who are called by My name will humble them- of Business Link, LLC. 375 N. Stephanie St.,Bldg. 23, Suite 2311, Henderson, NV 89014. It is listed in Standard Rates and Data, #20A-Business-Metro, State and Regional. TopRank selves, and pray and seek My face, and turn from their wicked ways, then I will hear Nevada – Annual Statewide Book of Lists is a publication of Nevada Business Magazine. Advertisers should contact Sales at (702) 735-7003, or write to: Nevada Business Magazine, from heaven, and will forgive their sin and heal their land.” 375 N. Stephanie St., Bldg. 23, Suite 2311, Henderson, NV 89014. Demographic information available upon request. Month-to-month circulation may vary. Nevada Business Magazine is published monthly. Subscription rate is $44.00 per year. Spe- cial order single-copy price is $7.50. All contents ©2015 copyright, and reproduction of material appearing in Nevada Business Magazine and TopRank Nevada – Annual Statewide Book of Lists is prohibited unless so authorized by the publisher. Publisher reserves the right to refuse service to any agency, indi- Lyle E. Brennan By Whose Authority? vidual, business, company or organization. CHANGE OF ADDRESS: POSTMASTER: Send address changes to Nevada Business Magazine, 375 N. Stephanie St., Bldg. 23, Suite 2311, Henderson, NV 89014. Subscribers please include Publisher For more information on my Commentary previous address or mailing label. Allow six weeks. and to see some of my backup research, or EDITORIAL SUBMISSIONS: Address all submissions to the attention of Tarah Richardson. Unsolicited manuscripts must be accompanied by a SASE. Nevada Business Magazine as- COMMENTS if you wonder why I take the position I take, sumes no responsibility for unsolicited materials. DISCLAIMER: Editorial views expressed in this magazine, as well as those appearing in [email protected] go to www.LyleBrennan.com. area focus and industry focus supplements are not necessarily those of the publisher or its boards.

4 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM “Anthem is a strategic partner in building out a robust benefits program.”

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THIS ISSUE FEATURES

COMMENTARY Thanksgiving’s True Origins It’s Not About Pilgrims and Indians By Lyle E. Brennan COVER FEATURE 08 04 Transformers: Generation Innovation Retailers Technology Advances Change Tactics Nevada Economy By Kay Foley By Jennifer Rachel Baumer ON THE COVER: Kevin Budny 12 Galleria at Sunset INDUSTRY PHOTO BY: FOCUS Chris Tucker Public Works & Utilities 17BUILDING NEVADA Today’s World of Brokerage What to Know By Doresa Banning 92 RED REPORT 25 Tracking Nevada’s Deals SPECIAL REPORT 98 NAIOP Bus Tour Guidebook

DEPARTMENTS

23 Free Market Watch 86 Expert Advice 100 Commercial RE Report Be Thankful for How to Go Green Industrial Our Ability to Fail By Scott Seastrand By Michael Schaus 101 Business Indicators 87 Face to Face 24 Welcome to Nevada Don Hamrick 102 The Last Word What are you most thankful for? 84 Around the State

Badwater Basin Salt Flats is located within Death Valley National Park, sitting 282 feet below sea level. photography by Chris Tucker

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8 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM RETAILERS CHANGE TACTICS By Kay Foley

TO attract a new generation of shoppers and keep up with competition from online retailers, Nevada shopping malls are transforming into “mixed-use lifestyle centers” and encour- aging their tenants to profit from online shopping instead of fighting it. Their tactics seem to be working, as mall owners report record numbers of shoppers and few vacancies. Malls’ success can be partly attributed to an improved economy, which has boosted shoppers’ budgets as well as their confidence in using credit. According to Brian Gordon, a principal with Las Vegas-based research firm Applied Analysis, Nevada’s taxable retail sales for the 12 months ending June 2017 reached an all-time high of $56.5 billion. From June 2016 to June 2017, sales grew 7.1 percent, com- pared to 3.6 percent nationally.

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 9 Downtown Summerlin

“We’ve always seen our project as a sign of the rebirth after the recession. The steel structure for the office building stood there for several years as a giant symbol of what the recession did to the area. Once people saw the property coming back to life, they saw it as a sign that we could recover.” - Andrew Ciarrocchi, Downtown Summerlin

“From the trough of the recession recovered from pre-recession numbers, will contain 1.2 million square feet on (the 12 months ending June 2010) to with positive annual growth. “We had a build-out. The Outlets at Legends fea- the present day, Nevada’s taxable retail really good year,” he said. “All our retail tures more than 40 brand-name retail sales increased 49.7 percent,” said Gor- spots are full, and we’re in the process of stores and restaurants, anchored by a don. “Overall spending in Nevada, even negotiating a lease for our one remaining 240,000-square-foot Scheels and an when adjusted for our strong population restaurant space.” IMAX Theatre. The mall opened in 2008, growth, continues to expand at a faster Meanwhile, according to Scott Re- just as the economic boom was turning to pace than the nation as a whole.” horn of RED Development, The Outlets bust. at Legends in Sparks reported that year- “Our lowest point was actually the be- A Long Road Back over-year sales growth is more than 10 ginning of 2012, when our occupancy was A survivor in a competitive market, percent. lower than 65 percent,” explained Re- Galleria at Sunset, located in Henderson, “Not only have we fully recovered, horn. “We’ve been growing steadily since is an enclosed mall that recently cele- we have far exceeded our pre-recession then and occupancy is now more than 95 brated its twenty-first anniversary. Owner numbers,” he said. percent. From 2012 to 2017, our sales in- and operator Forest City Enterprises, has Rehorn is managing partner for leas- creased by $100 per square foot.” conducted two major renovations since ing with RED Development, a joint part- Now in an expansion phase, The Out- the mall opened in 1996, adding five exte- ner in the Sparks retail center, which lets broke ground in September on 75,000 rior restaurants in 2015. Galleria, with 1.6 square feet of new retail space and Olym- million square feet of space on two levels, pia Companies is developing two new ho- is anchored by five major tenants: Macy’s, tels on adjacent land. Dillard’s, Kohl’s, JCPenney and Dick’s Brian Downtown Summerlin, located at the Sporting Goods. Gordon western edge of Las Vegas, is another Senior general manager Kevin Budny retail center that has bounced back af- Applied Analysis said the mall is about 80 to 85 percent ter a trying experience, to say the least.

10 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Cover Story

The original developer, General Growth Mike Wethington, general manager of Properties, halted construction on the Town Square, added, “Mixed-use is a valu- project in 2007 when the recession hit. Scott able complement and a demand generator In 2010, the company sold the project Rehorn that attracts customers to retail. We have a to Howard Hughes Corporation, which substantial base of entertainment and high- RED Development finally opened the mixed-use retail and performing restaurants, and many of them office center in 2014. are number one, two or three in their entire Andrew Ciarrocchi, senior general favor. It had a nucleus of strong performers chain. Our occupancy rate for retail is 92 manager of Downtown Summerlin, said, that we knew would produce for us. It has CONTINUES ON PAGE 81 “We’ve always seen our project as a so many good fundamentals.” sign of the rebirth after the recession. The steel structure for the office building stood there for several years as a giant symbol of what the recession did to the area. Once people saw the property com-

ing back to life, they saw it as a sign that © 2017 we could recover.” Downtown Summerlin covers nearly HUTCHISON & STEFFEN 400 acres, with 106 acres devoted to a 1.2 million-square-foot outdoor retail center with 125 separate brands, including fashion and home furnishings tenants and a variety of dining and entertainment options. Tenants include several first-to- market retailers and restaurants. As of September 2017, its annual shopper count of 16 million was up slightly over last year, and only two or three retail spaces are currently vacant. Town Square Las Vegas is another property that had poor timing when entering the market in 2007. Chicago-based Fairbourne Properties manages Town Square and has 15 percent ownership, while the other 85 percent is owned by investment giant TIAA. In January 2017, Fairbourne and its partner bought Town COMPULSIVE WINNING DISORDER. Square from the lender after the original developer went bankrupt. The 97-acre lifestyle center contains 26 separate buildings with 900,000 square feet of retail, entertainment and restaurant space A FULL-SERVICE, AV-RATED LAW FIRM and 355,000 square feet of office. Fairbourne president David Harvey said, “We bought at the right time. Las Vegas PECCOLE PROFESSIONAL PARK 10080 WEST ALTA DRIVE, SUITE 200 was so badly hit during the recession that a LAS VEGAS, NEVADA 89145 lot of investors were afraid to run the risk of 702.385.2500 • HUTCHLEGAL.COM being in Las Vegas, but that worked in our

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 11 Feature Story

GENERATION INNOVATION

Technology Advances Nevada Economy By Jennifer Rachel Baumer

NEW, existing and relocating technology companies are making Nevada home in both metro and rural areas, bringing innovation across the board. So far, specific technology clusters have not developed. Nevada is seeing everything from bioscience to construction and telecommunications to entertainment.

12 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Feature Story

“In a lot of cities you have a sector Breadware, new to Reno this year, is that’s doing well or a place where it’s working with the University of Nevada, mostly big companies or all start-ups,” Dave Reno (UNR) on an accelerator program said Dave Archer, CEO, Nevada’s Cen- called the Innevator, a six-week boot ter for Entrepreneurship and Technology Archer camp for early stage Internet of Things NCET (NCET). “What strikes me about Nevada (IoT) companies. is that, simultaneously you have a vi- The IoT refers to a network of physical brant startup community, you obviously are engaging in our local ecosystem,” devices, vehicles and other items embed- have a huge number of companies that said Doug Erwin, senior vice president, ded with electronics, software, sensors, are already doing great things and then entrepreneurial development, Economic actuators and network connectivity which the large companies like Google, Switch, Development Authority of Western Ne- enable these objects to collect and ex- Apple and Tesla moving here.” vada (EDAWN). change data. Tech companies are diversifying Ne- “One reason [diversification] is good vada’s economy, doing everything from is if you’ve invested heavily in one sec- Critical medical software to manufacturing hard- tor and there’s a downturn in that sector, Communications ware, building batteries and making new there are huge economic ramifications,” On August 17, Governor Sandoval construction safer. said Archer. “One of the things going for signed Nevada into the FirstNet and AT&T “We’ve got a handful of companies Nevada is that we’re so diversified.” plan, a dedicated communications net- that have received external venture capi- A vibrant community of startup and work for emergency workers. FirstNet tal from Tier 1 and Tier 2 venture capi- relocated tech companies is forming in ensures that, in a crisis, first responders tal. Companies that are mostly on the Northern Nevada with its members pardon’t have to battle “all circuits busy” start-up side have relocated here and ticipating in the business community. messages to get emergency calls through.

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 13 Feature Story TECHNOLOGY

FirstNet will eventually link nation- Five or 10 years ago, high speed wide and Southern Nevada tech com- communications were a luxury. Now pany ClearSpace Aeronautics (CSA) will Doug they’re a necessity, said Husted. “If we integrate with it. CSA is a leader in drone Erwin do not make the investment today, we’re traffic management and control. The simply hurting the return on all those in- EDAWN company’s patent-pending technology vestments we made for tomorrow. Who’s is a scalable solution consisting of hard- going to want to live in those rural areas ware, software, firmware, algorithms and for business commerce, but for edu- if their children might not have access to artificial intelligence, utilizing communication and for the medical industry, all the educational opportunities they do cations through satellite cell towers. because we’re farther removed from in the urban areas.” “It allows us to know who’s flying those sorts of facilities. It’s important what and authorize and de-authorize we don’t lag behind in communications Battle Born Starups it,” said Shana Whitmarsh, co-founder, and education, healthcare and busi- More than 16 million zombies have CSA. “Visualize a new technology with ness commerce.” been killed in Southern Nevada. Nearly no way to control the traffic. Imagine The economic side of the communi- 110,000 individuals have traveled a com- drones crashing into aircraft or interfer- cations puzzle: rural areas without ade- bined 19,000 miles plus for the opportu- ing with first responders or being used to quate access to critical communications nity to waste zombies in a 2,000 square- hack bank accounts or medical data.” infrastructure will continue to fall behind, foot arena in the MGM Grand. The ware- Imagination isn’t necessary because and investments already made to their house-scale or epic-scale live virtual that’s what some drone operators are utilities become less profitable because reality game allows up to eight players doing: sending drones into the path of of society’s reliance on communications to take their chances against zombies emergency response helicopters, planes technology. in the Zero Latency free-roam game. dumping retardant on wildfires or using Answering the need for infrastructure While the company may be in Australia, them to access proprietary information in rural communities, VCA partnered with the tech – and the zombies – have made while creating dangerous situations. A Switch and Churchill County Communi- their way to the Las Vegas Strip. drone hit by a helicopter propeller could cations and embarked on a $100 million Another Nevada startup is Shirtwas- cause a crash and create shrapnel. Just mission, installing fiber optic cabling in cash, born out of online message board as birds can damage aircraft by being communities between Reno and Las Ve- conversations. Founder Ardon Lukasie- sucked into the engines, so can drones. gas. By the end of 2017, Beatty should be wicz started the company on his laptop, CSA’s technology will allow first re- the first community in the U.S. with all fi- combining user-submitted ideas to cre- sponders to control drone traffic, mov- ber optic cabling, serving today’s needs ate clothing. Established in 2014, the ing it out of flight paths or away from and tomorrow’s infrastructure demands. unique clothing line is becoming some- unauthorized areas, freezing it while dis- VCA is paying for the project, which is thing of an online community where connecting the operator and connecting made feasible by parent company Valley followers contribute designs, vote for law enforcement to land and contain it Electric Association, a non-profit electric favorites and share how having unique using apps on existing devices. utility committed to bringing critical infra- clothing sparks new conversations and Not all communications are critical in structure to its 6,800-square-mile service friendships. the sense of emergency, but 21st cen- area. Installing fiber optic cable forwards Nevada’s burgeoning technology tury communications are critical to busi- the opportunities to develop smart homes field hasn’t settled into defined industry ness, medical and economic functions and allows for real time control over elec- clusters yet – which means there’s a lot of communities. tric distribution systems. of diversity, from zombies on The Strip to “High speed communication is ob- earthquake technology outside Sparks. viously critical infrastructure and very Located in the Tahoe Reno Industrial important in our society,” said Thomas Center, Dynamic Isolation Systems, a Husted, CEO, Valley Communications Shana pioneer in the development of seismic Association (VCA). “It’s even more im- Whitmarsh isolation technology, essentially makes portant in the rural areas that you have shock absorbers for freeways and high ClearSpace Aeronautics high speed communications not only rise buildings.

14 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Feature Story

In rural counties, advanced manufac- erate entrepreneurship across the country Challenges turing is growing and data centers like and EDAWN received a grant for $300,000, Finding startup capital is only one Apple and Switch keep expanding. Some which will be used, in part, to create more challenge for Nevada tech companies. companies are using technology in new venture capital for startup companies. “There are challenges to just being and innovative but not media-splashy One Northern Nevada company a startup,” said Goldman. “They’re not ways. For example, ITS Logistics uses bridging the gap between technology unique to Nevada versus other markets.” a technology-driven system of ID chips and funding is Capstak, Inc. Goldman herself has 25 years experi- on boxes in their 630,000-square-foot “Capstak is a commercial real es- ence in the commercial real estate pri- warehouse in Northern Nevada to track tate technology company,” said Heather vate equity and investment management what’s stacked on every forklift. The fork- Goldman, CEO. “We’re matchmaking field, and still there are challenges to be- lift drives by the scanner, which logs the borrowers in commercial real estate with ing a startup company. products on it and where they’re going. funding sources by introducing them to “At the end of the day, when you’re the investment bankers and mortgage doing a technology startup, you need Calling All Angels brokers to place capital.” to be very conservative with the capital One of the places Nevada falls short Because real estate is by its nature you’re investing as you’re launching your for technology is capital. Where hub a local industry and capital investments product, and you also need to recruit cities like San Francisco and Boston can come from anywhere in the world, and retain the best quality staff,” added have startup funding available, Nevada Capstak uses technology to mix and Goldman. doesn’t have enough angel investors or match debt equity sources that fund venture capital companies. development, construction, acquisition In September, the U.S. Department of and refinancing with local commercial CONTINUES ON PAGE 89 Commerce invested $17 million to accel- real estate deals.

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 15

Public Works & Utilities

LEFT TO RIGHT Rudy Malfabon, Nevada Department of Transportation • Tim Oudman, Republic Services • David Bowers, City of Las Vegas Public Works John Entsminger, Southern Nevada Water Authority & Las Vegas Valley Water District • Tina Quigley, Regional Transportation Commission of Southern Nevada Doug Cannon, NV Energy • Connie Brennan, Nevada Business Magazine • Brandon Saliba, City National Bank Jose Esparza, Southwest Gas Corporation • Tom Husted, Valley Electric Association

Sponsored by Industry Focus PUBLIC WORKS/UTILITIES

we just haven’t seen that. There’s some fears there. Obviously we’re growing at a fast pace in Las Vegas and if we’re going to continue to see great roadway improvements, it’s going to take money. RUDY MALFABON: To be specific, when Congress passes a long-term funding plan for transportation in America, it’s a multi-year bill. With this current one, in 2020 there’s a big cut planned because they don’t take enough in on the federal gas tax to fund transportation. Right now, we love the fact that they passed the long-term bill, but we’re concerned because we thought they’d address that shortfall in 2020, that’s coming pretty soon. It would be a huge cut for the state, which transfers money to the MPOs (metropolitan planning organiza- dvancing technologies and shift- down portions of the electric grid. As tions) like RTC (Regional Transportation ing consumer expectations are we move into a future of evermore inter- Commission). That’s going to really hurt driving changes within the connectedness, I think security for our us. They continue to not address the is- utilities and public works sec- utilities and all of our infrastructure from sue in Congress with the federal fund- tors.A With those changes come potential cyber attacks is something we’re going ing. The fact is, the federal gas tax can’t opportunities for the future of Nevada and to be spending a lot of money on and we keep up with the spending levels they its growing population. Recently, leaders in need to remain very vigilant. Utilities are authorize. these industries met at the Las Vegas office a ripe target for that sort of cyber attack. of City National Bank to discuss current TINA QUIGLEY: We work closely with our operations and projects on the horizon. member entities and the state to come HOW HAS THE Connie Brennan, publisher and CEO up with a comprehensive plan for all the MARKETPLACE of Nevada Business Magazine, served as roadway infrastructure and traffic man- moderator for this event. These monthly agement and transit in Southern Nevada. CHANGED? meetings are designed to bring leaders to- My biggest concern moving forward, as gether to discuss issues relevant to their in- we become more reliant on using data DOUG CANNON: The challenge that we dustries. Following is a condensed version and technology to manage all of our sys- face is the ever-changing consumer. of the roundtable discussion. tems, is the collaboration that’s going to We actually plan now at the neighbor- be required in terms of sharing data and hood level, the individual circuit level, WHAT CONCERNS DO leveraging each other’s technology so because consumers aren’t looking at we’re not reinventing the wheel, or worse big power plants anymore. Consumers YOU HAVE REGARDING yet, entering into very proprietary sys- are looking at putting generation assets UTILITIES AND tems that can’t share data. on their own rooftop and putting battery DAVID BOWERS: My concern is continued storage in their garage instead of using PUBLIC WORKS IN funding for the public works infrastruc- the entire electric grid. We may not need NEVADA? ture. We’ve done a pretty good job with that big generation plan anymore. We the fuel revenue index. It’s helped us at may need to strategically look at what JOHN ENTSMINGER: My biggest con- a local level. The federal portion is really neighborhoods need more solar panels cern is cybersecurity. We’ve already uncertain at this time. There’s been talk on roofs so we can support the grid and seen successful hacks on utilities in the that it’s going to be a bright picture and provide voltage support and the ser- Ukraine that actually managed to shut you want the trillion dollar budget, but vices that customers need. It’s making

18 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Industry Focus

having choice about where the actual people think way out of the box, but it’s electrons come from, I absolutely think good. customers have choice today. TOM HUSTED: Distributed energy re- HUSTED: We don’t believe consumers sources are no longer a question of if have a choice today. The vast majority of they’re going to be affordable. They are consumers don’t have the ability to utilize affordable. So, it’s a matter of [consum- solar, to utilize batteries and use other ers] and us taking a different position in DER (distributed energy resources). Will the future that we’re extremely excited they in the future? Absolutely. We believe about. This vertically integrated indus- that the consumer needs to have choice. try is changing very rapidly. Now, we’re That’s what’s going to allow us to continue going to be a conductor of an orchestra to evolve this industry and obtain efficien- where we’re managing resources for the cies that we simply don’t have now. One consumer. We’ll facilitate the distribu- of the biggest impediments is the various tion and the management of an energy differences between the modeling of the system in coordination and conjunction companies that provide these services. with the end-use consumer. That is ex- citing because the consumer is going to be our first choice for power supply in HOW IS the future. TECHNOLOGY JOSE ESPARZA: As a natural gas company, a customer needs water to their DO CONSUMERS INFLUENCING YOUR home, they need electricity, but they HAVE A CHOICE BUSINESS MODEL? don’t necessarily need us. We under- WHEN IT COMES TO stand that. So we have to provide, not QUIGLEY: There’s only so much asphalt only safe and reliable service, but we ENERGY? and green time you can have in certain also have to give them the type of ser- corridors before you’re going to reach vice and the customer-centric service CANNON: You have a choice in where you congestion. The only way we can start they’re looking for. Amazon and Uber get your energy, to go out and put solar to see a difference is through the appli- have changed the game. As a utility in- panels on your roof to generate all or part cation of technology and new ways of dustry, we need to keep up with that and of your own electric needs. Customers managing that traffic. We’ll have to look we need to continue to offer tools where can go even further by installing batteries. at human behavior as well and figure out they can interact with us on a 24/7 basis Batteries aren’t quite at the price point how we encourage technology and public and interact in such a way where they where we’re going to see large scale con- partnerships so we’re creating systems see fit in today’s day and age. sumer adoption, but we’ve seen signifi- that get people out of cars. I like to talk TIM OUDMAN: I think education, in gen- cant reduction in the cost of solar panels. about the concept of micro-transit. When eral, about operations and the positive I suspect over time we’ll see similar re- you think of transit, you think of a bus impact they have on the community is ductions as the technology is embraced. that stops every quarter of a mile along a something for consideration. All these That will be another tool that a consumer fixed route. With these new logistics and operations are very complex and they’re can choose, a battery to charge during the new algorithms that technology com- sometimes misunderstood. I’ll give you low cost time periods, discharge during panies are developing, we could get to a an example specific to Republic. We get periods where energy might be more ex- point where we can create a very custom- a lot of non-recyclable material that peo- pensive and essentially have control over ized route to get from where they live to ple put in the recycling cart, so that just what their ultimate bill is. Does it make where they work. contaminates the good recyclables. De- sense to have multiple competing power BOWERS: We’re not sure what the future termining how best to effectively com- grids in one location and multiple wires? holds as far as autonomous vehicles. municate with our customers, it’s an on- It’s like multiple entities having roads go- Some people say it’s really going to re- going and ever-evolving process around ing to the same places. I’m not sure that’s duce the amount of traffic because cars education. an effective use of the public’s funds. But, are going to be able to travel faster. You’re

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 19 Industry Focus PUBLIC WORKS/UTILITIES not going to have the signal stops because the signals are going to be smarter. WHAT PROJECTS At the same time, you’re going to have a OR CAPITAL lot of new passengers. Theoretically, you could put your 12 year old in an autono- IMPROVEMENTS ARE mous vehicle and get them to the soccer IN THE WORKS? game or you might go to the airport and have your car drive back to your house. QUIGLEY: We’re one of the only metropolitan There’s a lot of questions about whether areas in the U.S. that does not have any type that is going to be a positive or negative of light rail or, what we’re calling now, “next effect, but we definitely know the current gen transit”. [That type of transit has] the abil- model is not going to work going forward ity to move within the appropriate corridors over a long period of time. where you’ve got a lot of urban density, po- HUSTED: The same applied science is tential for economic development and con- happening in our industry. You go to the nectivity to your airport or major economic Consumer Electronics Show and see all destinations. Yet, we’re also one of the fast- those gadgets that are waiting to talk to est growing regions. I am a big believer that us. We come from an industry in which there are certain corridors where next gen we’ve got an intangible product. It’s hard changed the industry. The driver is the hu- transit is going to be very appropriate. We’re to manage. All of that is changing. Right man desire to get to those points to allow doing a large outreach effort to the commu- along with transportation, we’re see- us to be able to manage transportation nity to learn where they think it’s most appro- ing a merging of these technologies that and energy use in a different manner. priate that we invest dollars for the purpose

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Industry Focus PUBLIC WORKS/UTILITIES of moving people. The corridor that we will be ter, then we sort it from there. We probably taking a very strong look at is one that’s ac- have about one third of the Valley to go. tually already underway and that’s Maryland ENTSMINGER: Our biggest project by far Parkway. We’re also taking a look at the resort is our new low lake level pumping station. corridor and partnering with the resorts them- That’s a $650 million project that we’re slated selves on how we are going to move people to bring on line the first quarter of 2020. The from the airport to the Strip, convention center importance of that is it gives us the ability to and downtown. pump water out of Lake Mead regardless of CANNON: We’re really focused right now on where the lake level goes because our pumps renewable energy development. One [renew- will be submerged below the point where the able project] has already been commissioned Bureau of Reclamation can no longer release and another one will be commissioned very water from behind Hoover Dam. We’ll have shortly. It’s 179 megawatts of electricity, pho- secure water delivery infrastructure even if tovoltaic solar. This is being installed out in the the federal government can’t deliver water to Apex area. In addition, we’ve got two projects Phoenix and Los Angeles. That puts us in a down in the El Dorado Valley. We call them very enviable position. Boulder Solar 1 and Boulder Solar 2. That’s HUSTED: In a gambling state, who would another 150 megawatts. Then we have an- have bet that Beatty was going to be the other 100 megawatt solar project that’s out a time to help spur economic development in first all fiber optic community in the state? couple years, but that process is starting. We these areas. Finally, we’re doing an 8.4 mile It’s one of the communities that we serve have seen tremendous opportunities in solar. project up in Northern Nevada as well. We’re and we’re building fiber optics to every home BOWERS: You have seen downtown [Las Ve- very bullish on growth. and business within our service area. That’s gas] transform from a narrow sidewalk, large MALFABON: We’ve been concentrated on the first phase of a $100 million project. It’s asphalt travel way to wider sidewalks with bike eliminating some of the bottlenecks. We’re ongoing right now and will be completed in paths and narrower roadways while still con- also going to have to do a lot more with Cal- 2018. We’re taking that same blueprint and veying nearly the same amount of traffic. It’s trans (California Department of Transporta- partnered with Switch, CC Comm, etc., in really a new focus on allowing pedestrians, tion) with looking at the I-15 corridor. It’s one building an all-fiber network that goes from bicycles and higher order transit. We’re trying of the things that Mayor Goodman has really Arizona all the way to Oregon. We believe to get people out of the vehicles, allow them been focused on. There’s a lot of opportunity that’s the future for the state of Nevada, tak- to walk or ride their bikes because it’s health- for collaboration. Even removing some of the ing advantage of the opportunity and build- ier. It’s taking congestion off the roadways. A bottlenecks in the Valley is really working with ing another leg on the economic stool, which big project we have coming in the near future Henderson, Las Vegas, RTC, the various enti- is technology. is Las Vegas Boulevard. We’ll be picking it ties down here. We’re very good at teaming up up from Sahara to Washington, so it’s a big and pooling our funds in a systematic phased SAY WHAT stretch. It’s one of the main corridors that has approach. On I-11, Arizona gave us a good a lot of business and room for growth, but very overview of what they’re doing, eventually “I, Brian Sandoval, Governor of the State narrow sidewalks and wide traffic lanes. We’re building that in phases. It’s one of the things of Nevada, pursuant to the authority vested looking forward to that one. where we’re looking at the entire state and de- in me by the Constitution and laws of the ESPARZA: We plan, over the next three years, veloping a long-range transportation plan that State of Nevada, hereby declare a state of to spend about $1.7 billion throughout our will look at different corridors, not just I-11, but emergency for Clark County and direct all service territory in the southwest. We’ll be other freight corridors that are needed to be state agencies to supplement the efforts of political subdivisions to save lives, protect replacing and upgrading several miles of expanded in a phased approach. property, and protect the health and safety of pipeline here in the Las Vegas Valley area. OUDMAN: Over the next 12 months or so, persons in this state.” We’ll be installing new pipe to keep up with we’ll spend about $30 million more on fin- —Excerpt from the Declaration of the growth, which we’re really excited about. ishing off our new recycling program. Sitting Emergency following the October 1, 2017, We’ll be expanding outside of our traditional here about this time next year, the whole Val- Route 91 shooting which killed 58 and service territory to Mesquite, Pahrump and ley will be converted to the new program. So wounded over 500 others. Spring Creek in Nevada. We’ll take one at a we get all [recyclables] to the recycling cen-

22 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM COMMENTARY Free Market Watch

BE THANKFUL FOR OUR ABILITY TO FAIL Michael Schaus is communications director for the Nevada Policy Research Institute.

he late Steve Jobs once explained that, “A lot of times, Moreover, when entrepreneurs finally do succeed with major in- people don’t know what they want until you show it novations, the subsequent disruption of markets and industries may to them.” well mean the failure of less innovative competitors. This is clearly the mentality of a successful entrepreneur. Indeed, the freedom to try and to fail is the very engine of TPart of this mindset is the ability to see the world, and the progress. marketplace, with fresh eyes — to spot new ways of doing things Steve Jobs saw an opportunity to create something new in the and then exploit those opportunities while the rest of the world is computing world. But his first attempt to market and sell his innova- still oblivious. tion gained little attention outside of wonky tech-circles. But, there’s another — possibly more important — aspect to en- That failure taught him an important lesson: To succeed, he trepreneurship: The willingness to risk failure. needed to capture prospective buyers’ imagination. And as a society, we should be thankful we live in a country Then, during his first helming of Apple, Jobs failed again: where the freedom to fail actually exists. It’s a freedom that is often Famously arrogant, he increasingly lost credibility with his own underappreciated, if not outright disdained. board of directors. Effectively fired, he went off and started Grade schools across the nation have been waging war on the his own firm, NeXT — which struggled. Yet Apple, too, was freedom to fail for several decades. Little League athletes often re- soon struggling. Eventually, after several CEO changes, it rec- ceive trophies regardless of performance, poor grades don’t prohibit ognized it needed Jobs’ vision. students from advancing to the next level and graduation rates seem So Jobs, now more mature, was allowed back in Apple’s saddle. more important to school administrators than the actual quality of the The rest is history. education that graduates receive. Only a bit over a decade ago the first iPhone was sold, and in And the war on failure isn’t limited only to public education. breakneck change, an entire “app” industry arose, employing mil- Young adults increasingly expect taxpayers to protect them from lions of tech-savvy workers. Massive market disruption followed, failure by providing “free” college, subsidized healthcare and artifi- creating many millionaires overnight, bankrupting others and yet cially high minimum wages. bringing wondrous realities to millions of consumers worldwide. The corporate world too seems anxious to eliminate failure. Bail- Such magic is only possible because failure remains a re- outs have been given to banks, insurance companies and automobile spected component of America’s economic freedom. Silicon manufactures. The “green energy” industry is so awash with taxpayer Valley, for example, has for years been characterized by its subsidies, it’s almost unbelievable that any solar company fails at all. unique attitude: “Innovate or die.” Indeed, as a society, we seem to be on a mission to wipe out the Compare that to the public sector, where deficits can be run risk of failure wherever we find it. in perpetuity, performance does not correlate with a drop in It’s a misguided crusade. revenue and “failure” is treated with taxpayer-funded bailouts Failure is always an essential part of the learning process. Wiping and a continuation of the status quo. it out would ultimately mean wiping out learning itself. Free men and As we celebrate Thanksgiving this year, we should be thankful women, risking failure — if necessary, time and time again — have for the entrepreneurial spirit that has made America the land of pros- driven human progress throughout human history. perity and opportunity. But it is also important to recognize that this The widespread prosperity increasingly enveloping the world is spirit only exists because we live in a society where each one of us their gift to mankind. has — as we reach for our dreams — the freedom to stumble and fall. American entrepreneurs’ unstated motto has long been: “Fail The choice is clear: What is America to become — a realm quickly, and fail often.” Nine out of ten new startups don’t make it where everyone lives in “safe spaces,” protected from harsh reality past their first year, but a lot of learning is going on. Even the most by ever-proliferating “participation” trophies? successful entrepreneurs in history — Rockefeller, Ford, Jobs — at Or are we to remain a land where reality is king — and innova- times faced bankruptcy or insolvency. tors like Steve Jobs still walk the land?

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 23 Welcome to Nevada

Alchemy Basecamp ERG Aerospace This technology, software services and Outdoor Gear Corporation solutions start-up recently announced This camping and outdoor gear company Announcing a new location for its compa- plans to establish headquarters in Reno. was recently established in Las Vegas to ny headquarters, ERG Aerospace plans to Offering a suite of cloud-based optimi- serve both locals and tourists seeking out- relocate its current California operations to zation tools, applications and training, door experiences throughout the Silver State. Washoe County. The company manufac- Alchemy focuses on higher education With growing interest in activities such as tures open celled metal foam, carbon foam and provides services to organizations hiking, camping and water sports in the re- and ceramic foam materials for the aero- that utilize business applications such as gion, Basecamp offers outdoor gear, cloth- space, national defense, biotech and other Workday Student. The company began ing and accessory rental options. Company technology industries. Capital investments hiring for a variety of full-time posi- owners hope to grow the team in Las Vegas, of more than $2.1 million will be made tions and is expected to double its work- eventually expanding their reach nationwide with plans to hire 13 employees at an aver- force annually over the next three years. with rental deliveries across the U.S. age wage of $30.92 per hour.

Virtual Guard, Inc. Currently based in Los Angeles, this video monitoring company has plans to relocate their headquarters and command and control center to Southern Nevada later this year. Used throughout the U.S. and Canada, Virtual Guard develops and integrates technology for the perimeter security sector to prevent crime in large business facilities. This move would bring $355,402 in capital investments to the region and 80 new posi- tions with an hourly wage of $22.31 in the first 24 months.

24 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Cover Story

CONTINUED FROM PAGE 11 Even traditional malls like Galleria are responding to changing demands by of- percent and 95 percent of our office space Andrew fering more dining options, including res- is leased. We’re about to add a residential Ciarrocchi taurants with access from the parking lot component with two hotels.” instead of the mall interior. Galleria has Downtown Summerlin also added seating areas where people Adapting to the Shift can relax and gather. Other attractions “Retail has received a lot of bad million millennials. Retailers that have fig- include a Sunset Express train for kids, press lately, but I guarantee they’re talk- ured out how to reach out to them and the Sun Striders mall walking group for ing about tenants the average shopper bring them into their stores are wildly seniors and Funset Kids Club. hasn’t visited in a decade,” said Rehorn. successful.” Malls across Nevada are counting “Some of the traditional stores are drag- One of the ways mall owners are re- on community events to draw people in, ging down the statistics. T.J. Maxx, Lu- sponding to the younger generation of calculating that some of them will stay lulemon and plenty of others are expand- shoppers is by offering them entertainment to spend money. Ciarrocchi said Down- ing as fast as they can, but the press and dining options in addition to shopping town Summerlin considers itself a com- doesn’t focus on them.” opportunities. “It used to be considered munity center, hosting a Festival of Arts He also noted that successful stores risky to have restaurants and entertainment in October, Vintage Market Days, wine are value-oriented and also offer excel- venues at a retail center, but today they’re walks for charity, beer fests and more. lent customer service. “They’ve also fig- the anchors,” explained Harvey. “Young “Events are the key to our marketing pro- ured out that the 39 million baby boomers people especially aren’t that interested in file,” he said. aren’t the ones spending all the money in ‘stuff’. They value experiences, going out, Town Square hosts more than 90 events retail stores,” Rehorn added. “It’s the 50 being with friends and family.” a year to draw in families and the communi-

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“Now, you don’t have to leave your house to shop, so when you do go out, you want to make it special” —Mike Wethington, Town Square

ty, including 5k charity events and celebra- channel retailer, you’re not doing well mortar store can complement an online tions for holidays throughout the year. today. You need to offer your products on retail business. For instance, Fabletics the internet so shoppers can look things started as a strong brand online, but Online Changing up, see what’s there and compare prices. they realized their customers wanted to the Retail Game The internet has made it so easy to make touch and feel the product as well, so Although online transactions ac- sure you’re getting the best price. To be they brought that experience into the re- count for only about 10 percent of all successful, a retailer has to offer a price- tail environment.” retail sales, that figure has been steadily matching program.” Online shopping can actually help in- growing each year. Brick-and-mortar Ciarrocchi noted, “Sophisticated crease sales at a traditional store. Rehorn retailers are scrambling to adjust to the brick-and-mortar retailers are partner- noted that in women’s clothing, 65 per- new reality. “Now, you don’t have to ing with their online bases and allowing cent of everything a woman buys online, leave your house to shop, so when you people to surf their websites inside the she returns. If she returns it to the com- do go out, you want to make it special,” store to identify a certain product and pany’s brick-and-mortar store, 80 per- said Wethington. “You want to go to a then work with the service staff to find it cent of the time she then makes an ad- gathering spot. That’s why mixed-use and try it on. Customer service builds re- ditional purchase. The end result is more lifestyle centers like Town Square are so peat business. In addition, a brick-and- sales overall. successful.” Instead of fighting the growing trend Holiday toward online shopping, retailers are look- Shopping 2017 ing for ways to offer shoppers a seamless Retailers across the country are gearing experience that combines both online and David up for a banner holiday shopping season brick-and-mortar components. Harvey in 2017. The National Retail Federation pre- “Online has affected retail hugely,” dicts an increase of 3.6 to 4.0 percent over Town Square said Harvey. “If you are not a good omni- last year’s shopping numbers.

82 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM “The 2017 holiday season will right now and we have a new be better because the econo- “Retailers that have frontier every day.” my is better,” said Rehorn. “We have lots of faith in the fu- In addition to holiday pa- figured out how to reach ture,” said Rehorn. “Shopping rades, photos with Santa and out to [millenials] and centers are living, breathing things other traditional promotions, bring them into our stores that are constantly evolving. Things Nevada malls have developed are wildly successful.” we did 30 years ago we wouldn’t unique ways to draw in their dream of doing today and 10 years customers. Downtown Sum- — Scott Rehorn from now, we’ll be doing something merlin will offer an outdoor ice totally different.” skating rink, as well as a new Santa’s Chalet this year. Dur- Harvey said he expects entertain- SAY WHAT ing the holiday shopping season, Town ment will continue to be a strong draw

Square will feature man-made snow for retail centers, along with stores pro- “I am gratified that the BLM (Bureau of each night at 7 pm and the Galleria is viding health and beauty products and Land Management) has accepted our basic opening a Raider Image store in time for services. “It will be interesting to see argument, which is that we can balance conservation of the sage grouse without the holidays to take advantage of the whether traditional apparel stores will injuring the economic lifeblood of Nevada’s excitement about the Raiders moving to be able to perform against competition local communities.” Las Vegas. from off-price stores and online retail- —Attorney General Adam Laxalt’s statement on the BLM’s decision to revise ers,” he said. “The bottom line is that we it’s 2015 sage grouse land-use amendment What’s Ahead don’t know. We’re in a discovery period for Retail? Chain stores that over-expanded in the boom days of the early 2000s are consoli- dating and becoming leaner, and some of the older concepts are making way for new retailers with fresh ideas and new ap- proaches. Ciarrocchi noted that the energy generated by entertainment and dining is subscribe one key to success in the future, but added, “You still need solid anchors to provide TODAY the concentration of brands that brings in shoppers. Years ago, it was just retail in an NEVADABUSINESS.COM enclosed mall. Now, successful projects have a new combination: a large concentration of retail plus lifestyle offerings, plus events to draw people in.” While noting that climate control is a big advantage for an enclosed mall like the Galle- ria, especially in Nevada’s summer heat and windy conditions, Budny shared that Forest City is exploring ways to adapt the property to changing retail conditions. “In the future, shopping centers will be more community- driven and will include office and residential components,” he said. “We’re now exploring those types of ideas with the City of Hender- son zoning department.”

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 83 Around the State UNLV Wins in Solar Decathlon Co-Working Space Designed The University of Nevada, Las Vegas’ (UNLV) team has won for Women Opens multiple awards at the U.S. Department of Energy’s Solar Bloom, a co-working space for women has opened in Southern Decathlon competition. Among others, the school took home Nevada. The space was designed to help women with the second in the engineering and architecture contests and first challenges of balancing work with family through a non- in innovation. The school placed eighth overall in the 10-day traditional workspace. The creators of the space hope to inspire competition which challenges student teams from around the connection and community for women through the space. The world to design and build full-size, solar-powered houses. office space is intended for small start-ups, remote employees or those needing a professional working environment. Las Vegas Ballpark Announced The Howard Hughes Corporation has announced plans to LP Insurance Named develop and construct a baseball stadium in Downtown Best Practices Agency Summerlin. The stadium will be developed on eight acres LP Insurance Services, Inc. has been named an Independent south of City National Arena and will be the future home of Insurance Agents and Brokers of America (IIABA) best the Las Vegas 51s. The announcement was made after the Las practices agency. The IIABA, along with Reagan Consulting, Vegas Convention and Visitors Authority’s (LVCVA) board annually study participating agencies who submit to extensive of directors approved a marketing partnership which gives financial and operational data for review each year. Over the LVCVA naming rights to the stadium. The Las Vegas 51’s 1,500 agencies participated in this year’s study but only 262 current home at Cashman Field will turn over to professional qualified for the designation. Those chosen must be among the soccer and become home to the Las Vegas Lights FC. top-performing agencies in one of six revenue groups.

84 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM

Expert Advice CONSERVATION HOW TO GO GREEN TOP FIVE WAYS TO INCOROPRATE CONSERVATION IN YOUR BUSINESS Scott Seastrand is Vice President of Western Elite.

ecycling has become much more popular nies that help businesses recycle these items, such as than it was decades ago, especially since Terracycle, which is a cigarette waste recycling pro- most of us have become more conscien- gram. The company accepts everything from extin- tious of our limited resources. Therefore, guished cigarettes, cigarette filters and loose tobacco Rrecycling has become a staple in most people’s daily pouches to outer plastic packaging, rolling paper and lives, making it a greater importance that businesses ash. For every pound of cigarette waste Terracycle large and small make recycling a natural part of collects, $1 is donated to the Keep America Beauti- their daily operations. ful Cigarette Litter Prevention Program. Businesses throughout Nevada have made major leaps in going green by incorporating sustainable 3. REDUCE PLASTIC AND STYROFOAM elements such as LED lights and renewable energy One of the most detrimental types of waste is powered offices. Although there are many creative Scott plastic. Many cities across the country are working ways businesses can go green, many places are fo- Seastrand to decrease their use of plastic. Some grocery stores cusing on how to make good old recycling fun and Western Elite have gone as far as urging people to bring their own innovative. reusable bags or purchase them at the store. Restau- Here are some ideas for going green and creating a successful rants are also putting in work by steering away from using recycling program at your company: Styrofoam. The packaging is cheap to produce, but its light- weight texture makes it easy to get picked up by the wind and 1. RECYCLE ELECTRONIC WASTE swept into drains, on the ground and into water ways. Choos- Some people may not realize they can recycle their elec- ing a different yet still effective packaging method can help tronics, everything from computers, printers and fax machines sustain our environment. to televisions and DVD players. You can hold a drive among employees to collect the electronics and donate them to a local 4. 3-D PRINTING charity and/or thrift store. 3-D printing has given businesses a new avenue to recycle For the charitable minded, The Blind Center of Nevada has while increasing their production speeds. Benefiting both large an electronic recycling program where they accept everything businesses that deal with mass production as well as small, pri- from DVD players to office phones. For business customers, vate businesses, a 3-D printer can create metal parts at com- they offer free asset-removal, which is carried out by their mercial production speeds. This reduces by-product waste. in-house removal team. After the items are repurposed or re- cycled, 100 percent of the proceeds go directly to The Blind 4. CREATE CORPORATE RESPONSIBLITY Center of Nevada. The best way to keep employees motivated when it comes to being green is to implement a corporate social sus- 2. RECYCLE CIGARETTES tainability program for your company. This includes com- Many wish to quit smoking, but those that haven’t yet ing up with specific goals and ethics for how your company kicked the habit can still give back to the environment by re- supports sustainability. It also gives your company a way cycling their cigarettes. Some businesses hold drives to collect to vocalize your support and that you are environmentally packs of cigarettes during the annual Great American Smoke- conscious. out in an effort to promote recycling as well as quitting of Companies that have a sustainability program in place smoking. can use it to monitor their team member’s recycling on a Another way to incorporate this type of recycling into your monthly basis, create charts to keep track of how your com- daily business is to have designated cigarette recycling recep- pany is improving recycling numbers and hold friendly tacles located throughout the office. And, there are compa- competitions between departments/employees.

86 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Face to Face MOVERS & SHAKERS

“You get what you give, kindness begets kindness.” DON General Manager HAMRICK Chapman Las Vegas Dodge Chrysler Jeep RAM (31 years in Nevada) Type of Business: Auto Dealership | Hails from: Casablanca, Morocco 13 years with company in Nevada | Based in: Las Vegas

How did you first get When you were a kid, What do you wish you into your profession? what did you want to be? would have learned at the My brother was successful in auto sales Elvis! I remember reading a LIFE magazine beginning of your career? and I felt I could be too. I started with article and thinking he had the life. That it’s okay to have fun at work. I was Jack Biegger’s Sahara Datsun in 1978. too serious at the beginning, but I’m What business advice would making up for it now! What do you want you give someone just starting your legacy to be? in your industry? What is the best moment Part of what attracted me to this Honesty trumps all. Do what you say of your career? business was the opportunity to meet you’ll do and everything works out. We Opening my first dealership at 39. I new people every day. We’ve built called our first dealership “Integrity wasn’t born into this business and had no tremendous friendships through the Dodge” as a constant reminder. financial help. For me, that was a big deal. years so, personally, being a great friend to others is important to me. What is your pet peeve? What is your favorite thing Complainers! I was taught to bring about living in Nevada? If you could be any fictional solutions along with concerns. Negative- Las Vegas is such a dynamic city. There character, who would minded individuals can make things are few places in the world that have a you be and why? difficult and bring down an entire group. “palpable heart beat” but Las Vegas is I read a ton of comic books growing up one of them. If you work hard and treat and thought Spiderman was the bomb! What is your motto? people right, the economic soil is very He was a bit of a wise guy, but pretty You get what you give, kindness fertile in Las Vegas; you can make it regular too. begets kindness. happen here.

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 87 VEGAS OVERCOMES EVIL WITH GOOD

#VEGASSTRONG

Nevada Business Magazine recognizes and thanks our first responders, medical professionals and heroes for their unselfish acts of bravery and kindness. Your goodness overwhelms us. Feature Story

CONTINUED FROM PAGE 15 “We get the brightest and most en- Tom ergetic new grads, which we love,” said Husted Mykle Gaynor, CEO, Clickbio, which Staffing and Recruiting designs and manufactures tools for life Valley Communications Recruiting and retaining hasn’t been Association science research. By improving on the that hard and Capstak’s worldwide on- standard plasticware used in lab analy- line network means geographical loca- sis, they’re able to cut down on the num- tion isn’t as important. Center, UNR. “I think a big reason for fo- ber of steps researchers have to take. Capstak is housed at the UNR’s Inneva- cusing on technology jobs is that they’re “I moved to Nevada to work for a local tion Center, which is located off-campus to a driver of our economy. Technology cre- company on the automation side of sample be accessible to the business community. ates jobs and creates very high salaries analysis, making robots that would account While Goldman could draw from 25 years which, not only brings up wages for those for efficiencies in plasticware,” Gaynor said. worth of contacts in her field, Capstak people earning those salaries, but actu- After years of doing that he put together a hired its chief technology officer in Reno. ally brings up the whole community.” business plan for a company that optimizes “That was the bedrock for making Eighteen months in, the center is home to the plastic for better use. the decision to stay: we can hire great 50 companies, three investor groups and Clickbio’s challenge is lack of local people and there’s a wealth of talent in three mentor groups. customers. Proximity to California helps, the area,” said Goldman. Clickbio, also located in the Inneva- but doesn’t solve everything. “We currently have six venture-funded tion Center, solves staffing issues by “I was in Hong Kong last week, San Di- startups running out of our Innevation cherry picking the University’s best ego today, Philadelphia and Boston Sunday Center, all technology companies,” said engineers and putting them through a and Monday of next week and Texas on James Sacherman, director, Innevation training program. Wednesday,” said Gaynor. With customers

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 89 “Technology creates jobs and creates very high salaries which, not only brings up wages for those people earning those salaries, but actually brings up the whole community.” James Sacherman, Innevation Center, UNR

that scattered, he’d still have to travel even if “Workforce is the biggest question of mechanical systems for a biotech firm he was located in a tech hub. However, with they have, just because, from a com- – would be hard to find in Reno, though 30 percent of the market in San Francisco, munity size perspective [for a company] that’s starting to change. The more tech 15 percent in San Diego and 15 percent in leaving the Bay Area, one of the best companies locate here, the more attrac- Boston, the company is in Nevada for the places for tech in the world, they need to tive Nevada is to professionals. lifestyle and the business environment. get a sense of what’s feasible here,” said Sometimes companies bring their Clickbio’s in the process of hiring Erwin. staff. Breadware, which creates circuit- eight new people, which is an interesting What they’re told is to talk with other ry for devices that connect to the IoT, twist on the tech industry in Nevada. For tech companies that have successfully started up in Santa Barbra in 2015, but years, workforce was a sticking point; hired in Northern Nevada. If told honest- the cost of doing business in California Nevada didn’t have the talent tech com- ly what they need is beyond the area’s led them to Nevada. Breadware arrived panies needed. Higher education is try- grasp, the move probably isn’t going to with eight employees in March and now ing to meet that challenge. work for them. “Talent is definitely an is- has 15. “Community colleges tend to be very sue,” said Erwin. Daniel Price, CEO, calls Breadware’s responsive to workforce issues and are In some ways, it’s the diversity of product “IoT in a box” because it comes doing a lot of certificate programs and Nevada’s tech industry that’s making it ready to build the right electronics for an mini degrees,” said Archer. “They can hard for new companies to hire in state individual company’s use. Some people create a program and turn out qualified because Nevada doesn’t have special- use Breadware’s product to teach IoT workers.” ized knowledge. in the classroom and Breadware’s per- When tech companies contact “One thing we’re trying to overcome sonnel, themselves, are getting ready EDAWN, they want to know what other on the technology side is, we don’t have to teach. They’re working with UNR tech companies are around, what univer- a deep labor pool in any one area,” said to teach a micro degree related to ad- sity and community college training pro- Sacherman. So, specialized tech profes- vanced topics in electrical engineering grams exist and all about the workforce. sionals – say a chemist with knowledge and computer programming.

90 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Feature Story

Reno Reinvention? serves], but across the state, we’re build- One question that gets asked as Re- ing another leg on the economic stool,” no’s tech industry takes off is whether or Heather said Husted. “That’s good for the entire not Reno is or could be or even wants to state. As we increase our technological be the new Silicon Valley. The influx of Goldman capabilities, that makes us more attrac- Capstack, Inc. creativity and economic rewards would tive for economic development business be welcome, but would the traffic, the commerce opportunities. We have gam- sizeable income inequality and the hous- next Washington DC or the next Las Ve- ing, we have tourism, but to continue to ing prices? gas. Look how many years it took Las develop and build the technology leg on Plus, Silicon Valley didn’t become Vegas to get to be Las Vegas.” the economic stool for the state is a tre- Silicon Valley overnight. “The roots of “If you look at where we are now, mendous opportunity.” Silicon Valley on the technology side go we’re nicely diversified, doing well in back to 1850,” said Archer. “The transis- startups, existing and relocated busi- IN BRIEF tor was invented there, the microproces- nesses, so I think we’re doing a pretty sor was invented there, Stanford Univer- good job. There’s a balance between the Las Vegas is becoming known for it’s sity, one of the top research universities right amount of growth and too much culinary offerings. According to recent in the world is located there, 30 percent growth, and I think people are aware studies, conducted by WalletHub, the city of the U.S. venture capital is located and paying attention to that now,” said has been ranked 14th best for vegans and there. They have such a head start on Archer. vegetarians, 19th for coffee lovers and being Silicon Valley I think starting over “As we continue to invest in commu- eighth best for “foodies”. is like saying wouldn’t we like to be the nications not only within the areas [VCA

HEADSHOT | EVENT | COMMERCIAL [PHOTO] CHRISTUCKERLV.COM

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 91 Larry Singer Newmark Knight Frank

Photo By Chris Tucker Building Nevada TODAY'S WORLD OF BROKERAGE WHAT TO KNOW By Doresa Banning

LARRY Singer’s team at Newmark Knight facilities management, transaction manage- asset classes in which they operate—retail, Frank (NKF) has provided services to Ain- ment, to name a few,” said Las Vegas-based office, industrial, hospitality and land. sworth Game Technology Ltd. for years. Michael Newman, CBRE’s managing director Other requirements are listening, advis- First, the commercial real estate brokerage for Nevada and the industrial practice leader ing, negotiating and anticipating. Develop- located a Las Vegas site for this gaming ma- for the region. CBRE also has a Reno office. ing and nurturing relationships with industry chines manufacturer and supplier’s 300,000 The broker’s overarching task is to add partners, such as bankers, title and escrow square-foot North American headquarters value while serving their client’s best inter- experts, architects, attorneys and the media, then helped them acquire, through auction, est, said Brendan Keating, the CEO and co- also are key, said Carol Cline-Ong, CCIM, an additional 5-acre parcel from Clark Coun- founder of Las Vegas-based Logic Commer- who described brokers as “connectors.” ty to square off the property. Having done so, cial Real Estate. Doing so requires collecting Cline-Ong is the CEO and a principal of MDL Ainsworth had 5 acres of unneeded land, for and analyzing data and researching and Group, a commercial brokerage and com- which NKF recently helped find a buyer. understanding the market—trends, opportu- mercial property manager firm in Las Vegas. These transactions and this ongoing re- nities, availability, pricing and more—for the Finally, brokers must build and maintain lationship exemplify commercial real estate a base of clients that include tenants, buyers, brokerage work. sellers, landlords and investors. “We are advisors and strategic partners “Probably the least important thing that with our clients (large and small) on all aspects Michael we do is take people out and show space,” of commercial real estate ownership; acqui- Newman said Singer, senior managing director of the sitions and dispositions, leasing, financing, international firm Newmark Knight Frank. His CBRE project management, property management, individual specialty is the office space market.

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 93 Building Nevada BROKERAGE

The Broker-Client • Remember the broker is there to provide Engagement Brendan market knowledge, insight and analysis so the client can make a better real es- While the process of a commercial real es- Keating tate decision. tate broker providing services to a client can Logic Commercial be complex with numerous factors involved, it Real Estate can be boiled down to a handful of key steps. Post-Recession First, a discussion ensues between the Changes broker and client about the latter’s needs, Professional Today’s commercial real estate market aims and risk appetite. The broker surveys Broker Titles in Nevada is “strong and steady,” a different the market for products that meet the client’s landscape than in the many years following Some brokers have designations, such criteria, obtaining all the information they’d the recession, said Mixer. As a result, broker- as CCIM (Certified Commercial Investment need to underwrite the deal. Once the trans- age also has changed. Member) or SIOR (Society of Industrial and actions are underwritten, the broker presents In Southern Nevada, the brokerage Office Realtors). These initials indicate that them to the client with lists of pros and cons. community has shrunk since the economic an individual has achieved a certain level The two sides discuss the options, and the downturn, as it “weeded out a lot of the of training and experience and has met the client narrows them down to a few. Then they less experienced brokers in the market,” he criteria for being recognized as an expert, tour those possibilities. added. Young professionals are entering the Mixer said. Depending on the type of client and their industry but not at the pace of those retiring, However, because a broker doesn’t have objectives, the next step could be creating a creating a gap. such an accreditation doesn’t mean they’re lease, acquiring a property, finding buyers or Plus, consolidation in the industry contin- not proficient. Some have been in the field some other step. The broker-client relation- ues. Larger companies are acquiring the re- and successful for decades. ship typically ends once that transaction is gional ones to compete on a national basis, completed, but it doesn’t have to. Newman said. “You, [the broker], want it to be a life-long Advice for More national companies have joined the process because everything is relationships Prospective Clients mix, both on the brokerage and client sides, in the real estate world. You want to be a re- Experts offered these five tips for com- Singer said. source, be available to them and want them pany executives or business owners who’re Fewer agents vying for the same transac- to know you’re here,” said Cline-Ong. seeking a broker’s services. They should: tions has heightened competition. Therefore, • Jump into the process early and not wait. brokers have had to become more knowledge- How Brokers Get Paid • Choose a specialist, an expert in what- able about the market and what’s happening Brokers get paid on commission. Usually ever business they’re engaged in. “You within it, broadly and within specific regions. that amount is a percentage of either the sale want someone that knows all the intri- “You have to be on your game,” Cline- price or the total lease value of a lease trans- cacies of your particular product type,” Ong said. “If I go into Henderson, I better action, said Mike Mixer, SIOR, the executive said Mixer. know where the next medical facility or cam- managing director of Colliers International • Select someone they connect and feel pus is going to be—know your product, know Las Vegas. His specific area of focus is land comfortable with and in whom they your area, know your client.” and hospitality properties in Las Vegas’ re- have confidence. Also to compete, many firms have shifted sort corridor. • To select a broker, meet with prospective from offering only the core business of bro- The commission percentage typically ones, maybe have lunch with them and kerage and investment sales to providing a ranges from 1 to 7 or 8 percent, depending test their knowledge and skill set. wider array of services, such as workforce on the deal size. A 1 percent commission is analysis for companies moving to the region common for huge projects, say $500 million and investigating business incentives for or more, whereas 7 or 8 percent is more typi- businesses that want to relocate or expand, cal for smaller ones, around $1 million. Newman said. “It’s important for tenants, buyers and Carol Northern Nevada has more people in owners to understand the commission Cline-Ong the brokerage business and more firms to- structure because it is part of the cost of the day than pre-recession, including some na- MDL Group transaction,” said Singer. tional brands, said Ken Stark, president and

94 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Ainsworth Gaming Technology building in Southern Nevada

“You have to be on your game. If I go into Henderson, I better know where the next medical facility or campus is going to be – know your product, know your area, know your client.” Carol Cline-Ong, MDL Group

co-owner with Bradley Elgin of Reno-based the peak in 2005-2006, said Stark. This is With these fundamentals as a backdrop, Stark & Associates Commercial Real Estate. unusual given the lending is tight and the fi- on the leasing side, existing tenants are being Stark specializes in office and investments. nancing process is more structured. forced to pay higher rents to stay in a proper- Competition is “fierce but friendly,” he added. “We’re not sure that the lenders can keep ty. If they don’t, the landlords will find a lessee While there’s not a lot of attrition out of the up with the momentum of what the proper- that can. Similarly, in Southern Nevada, once field, young people are entering it. ties are worth,” he added. landlords reach a certain level of leasing with In both ends of the state, the investor The rise in prices, though, is being driven their project, they can afford to wait to get the pool is more diversified today, Keating said. by a lot of cash in the market, high demand terms they want. However, tenants or buyers For one, more of them are institutional ver- and low supply. Stark described a scenario who need space for operating their business sus private equity owners. Second, many of where many people are spending $3, $4 or may not be able to wait. today’s investors are high net worth people $5 million in cash in a transaction. For brokers representing landlords, in this seeking stabilized cash flow instead of turn- “We’re starting to see tangible speculative market it’s difficult to obtain financing, to get around projects. They’re investing directly development and speculative development deals structured the way they want to maxi- into real estate rather than investing in com- when a tenant is not already in place for it. mize the return on investment, Singer said. panies that own and operate properties. It’s a little concerning to us, the pace of play,” The state’s Southern region is experi- Stark said. “There are not enough properties encing a shortage of Class A and Class B Challenges in out there for the buyers that we’re seeing.” office space due to minimal construction, the Industry Singer said. For example, if a tenant is look- Currently, Northern Nevada is experienc- ing for Class A space between 10,000 and ing a market that has some brokers uneasy, 20,000 square feet, they’re limited to about as the industry as a whole is struggling to sat- Mike 10 available properties. If they’re looking isfy demand, said Stark. Mixer in the 20,000 to 30,000 square foot range, Prices for land and industrial and invest- they’re down to five or six options, and for Colliers International ment property are higher than they were at 50,000-plus square feet, two choices. Con-

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 95 Building Nevada BROKERAGE sequently, they’re forced to look perhaps at Expectation space to be developed in the future, creating Ken a time challenge. for the Future “[The broker] needs to consider proper- Stark Consensus is commercial real estate Stark & Associates ties that are in the planning and predevel- brokerage in both Southern and Northern Commercial Real Estate opment stages, which are going to take 12 Nevada will see steady activity for the next months to 24 months to complete,” Singer two to three years, at least. said. “[Clients] need to leave a lot more time.” them. Also, more and more previously secret “I think our industry will continue to pros- Also slowing the process is clients or proprietary data are being aggregated and per for the foreseeable future,” concluded throughout the Silver State tending, in gen- sold. Newman. eral, to be more cautious in their decision- “It’s data overload,” Mixer said. “Unless making, taking the time to consider costs, you understand how to use it and analyze it, which are rising, and how they may control it’s daunting to keep up with.” IN BRIEF them. Technology has yet to “disrupt” the bro- Another challenge for brokers is catching kerage business but no doubt will, Keating The City of Henderson has been awarded and keeping up with technological changes said. two Department of Housing and Urban in an industry that’s lagged behind others in “We are focusing on how that is going Development (HUD) grants totaling adopting advances. For instance, more on- to change our business model, while keep- $1,775,139. The grants are intended to help line tools for analyzing and understanding the ing a nimble and high-liquidity approach to the city provide better access to affordable market exist today than ever, which is a plus, be ready to adapt to those changes,” he housing for low-income families. yet professionals need to learn how to use added.

96 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM

DEAL TRACKER

Sale, Land ADDRESS NEC of N. Gibson Rd. & W. Sunset S Rd., 89011 BUYER Henderson Collision, Inc. SELLER New Gibson 7.54, LLC Sale, Multi-Family DETAILS 7.54 acres; $3.1 million ADDRESS 1076, 1088, 1100 & 1112 Sierra Vista APN 178-02-201-002 Dr., 89169 SELLER’S REP Neal Anzalotti and Scot Prince BUYER Karris Chris John Revocable Trust of Logic Commercial SELLER Houter Investment, LLC DETAILS 32 units; $54,688 per unit Sale, Multi-Family APN 162-15-510-054 – 162-15-510-057 ADDRESS 218 E. Merlayne Dr., 89011 BUYER’S REP Robin Willett and Devin Lee, BUYER Andy Chen CCIM of Northcap Multifamily SELLER Anella A. & Marcy I. Teano DETAILS 8 units; $52,500 per unit Sale, Multi-Family APN 178-01-311-002 ADDRESS 3550 Paradise Rd., 89169 BUYER’S REP Devin Lee, CCIM and Jerad BUYER CP Howe & Arden, LLC Roberts of Northcap Multifamily SELLER Karlin Las Palmas Subsidiary, LLC E DETAILS 394 units; $68,020 per unit APN 162-15-201-005 Sale, Retail N SELLER’S REP Michael Shaffner and Michael LaBar of Marcus & Millichap ADDRESS 1711 S. Main St. and 1736 & 1800 S. Las Vegas Blvd., 89104 Sale, Industrial BUYER 1700 Vegas, LLC ADDRESS 1900 Aerojet Way, 89030 SW SELLER Bali Family Trust, et al. BUYER Cardinal Paint & Powder, LLC DETAILS 28,560 SF; $6,350,000 SELLER Paskin Properties, LLC APN 162-03-302-001 – 162-03-302-003 DETAILS 105,826 SF; $7,450,000 Sale, Office SELLER’S REP Paul Chaffee, CCIM and Wil APN 139-02-701-005 ADDRESS 8912 Spanish Ridge Ave., 89148 Chaffee, CCIM, SIOR of Sun Commercial Real BUYER’S REP Soozi Jones Walker, CCIM, BUYER New Spanish Ridge, LLC Estate SIOR and Bobbi Miracle, CCIM, SIOR of SELLER SKG Park at Spanish Ridge, LLC Sale, Multi-Family Commercial Executives Real Estate Services DETAILS 71,024 SF; $17.6 million APN 163-29-711-018 ADDRESS 5300 E. Craig Rd., 89115 Sale, Industrial SELLER’S REP Cathy Jones, CCIM, SIOR and BUYER IAVF Rubix, LLC ADDRESS 3101 E. Craig Rd. & 4380 Donovan Jeff Hachquet of Sun Commercial Real Estate SELLER Nellis Apartments Las Vegas, LLC Way, 89030 DETAILS 236 units; $52,966 per unit BUYER Gatehouse Las Vegas REI Sale, Multi-Family APN 140-04-211-001 SELLER JRTL, Ltd. ADDRESS 8301 W. Flamingo Rd., 89147 SELLER’S REP Michael Shaffner and Michael DETAILS 87,513 SF; $8.2 million BUYER Cimarron TIC, LLC LaBar of Marcus & Millichap APN 139-01-702-004 SELLER Fairfield West Flamingo, LLC BUYER’S REP Mitchell Asset Group DETAILS 240 units; $146,250 per unit SELLER’S REP Paul Miachika and Roy Fritz, APN 163-21-101-035 H CCIM of Sun Commercial Real Estate SELLER’S REP Patrick Sauter and Art Carll-Tangora of NAI Vegas Sale, Retail NW Sale, Land ADDRESS 205 – 245 N. Stephanie St., 89074 ADDRESS 4300 W. Tropicana Ave., 89103 BUYER Stephanie Promenade, LLC BUYER 4300 Trop, LLC SELLER Roxbury, LLC Sale, Office SELLER SWSW Investment, LLC and DETAILS 105,132 SF; $16,575,000 ADDRESS 2901 – 2931 N. Tenaya Way, 89128 Ritz 43E, LLC APN 178-09-811-008 BUYER Mandelbaum MOB, LLC DETAILS 14.8 acres; $18.5 million SELLER’S REP Rob Ippolito and Michael SELLER CW Capital APN 162-19-801-012 Zobrist of Newmark Knight Frank DETAILS 57,851 SF; $4,750,000 SELLER’S REP Ray Germain of Marcus & APN 138-15-610-012 Millichap Sale, Industrial SELLER’S REP Charles Moore and Bart ADDRESS 7705, 7715 & 7725 Commercial Way, DeBuono of CBRE 89011 WC BUYER Valley Freeway Industrial Park, LLC Sale, Office SELLER VFC III Industrial Buildings, LLC ADDRESS 7201 W. Lake Mead Blvd., 89128 DETAILS 113,531 SF; $13,780,000 BUYER RFII Acquisitions, LLC Sale, Retail APN 178-11-214-006 SELLER Torchlight ADDRESS 560 Gentry Way, 89502 BUYER’S REP Greg Pancirov, SIOR of Colliers DETAILS 105,761 SF; $13,750,000 BUYER Warda Properties, LLC International APN 138-22-712-008 SELLER Brennan Properties, LLC SELLER’S REP Mike DeLew, SIOR of Colliers SELLER’S REP Charles Moore and Marlene DETAILS 11,303 SF; $2,250,000 International Fujita-Winkel, CCIM of CBRE APN 020-211-09

[BC] BOULDER CITY [E] EAST [H] HENDERSON [N] NORTH [NW] NORTHWEST [O] OTHER [S] SOUTH [SW] SOUTHWEST [WC] WASHOE COUNTY

98 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Red Report N Sale, Retail 89143 89165 ADDRESS 633 E. 4th St., 89512 89085 89087 89166 BUYER EMR Land Company, LLC 89131 SELLER Scharff Family Trust 89084 89086 DETAILS 8,633 SF; $3.8 million 89149 89130 APN 008-242-04 89031 89081 NW 89115 Sale, Industrial 89129 89032 ADDRESS 8975 Double Diamond Pkwy., 89521 89134 89030 89156 N BUYER North Summit Company, LLC 89138 89128 89108 89144 SELLER Dennis J. Collins 89101 89110 89145 89107 89106 DETAILS 5,381 SF; $699,530 E 89104 89142 APN 163-210-11 89117 89146

89102 89169

Lease, Industrial 89135 89121 89147 89103 89109 89122 ADDRESS 945 N. Hills Blvd., 89506 89161 TENANT ID Tech Camps 89120 LANDLORD McKenzie Properties 89118 89119 89148 89011 DETAILS 61,875 SF; $2,241,587 for 87 89014 89113 months 89139 89123 89074 BC TENANT’S REP Chris Fairchild & Greg 89015 Shutt of Colliers International 89178 89012 LANDLORD’S REP Dan Oster of NAI SW 89002 Alliance 89141 89183 89179 89052 89005 H 89044 S

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 99 Commercial RE Report

INDUSTRIAL THIRD QUARTER

TOTAL MARKET Southern Northern

Total Square feet 119,648,214 82,483,519 Vacant Square Feet 6,538,773 3,628,193 INDUSTRIAL Percent Vacant 5.5% 4.40% New Construction 2,292,063 322,000 SUMMARY Net Absorption 2,765,844 -454,101 SF Average Lease sf/mo (nnn) $0.70 $0.360 THIRD QUARTER 2017 Under Construction 3,512,220 2,195,608 Planned 5,435,318 5,700,000 WAREHOUSE/DISTRIBUTION Total Square Feet 57,661,316 49,614,660 Vacant Square Feet 3,314,832 2,566,603 Percent Vacant 5.7% 5.17% SOUTHERN NEVADA NORTHERN NEVADA New Construction 2,292,063 322,000 Net Absorption 2,474,815 1,008,119

The Las Vegas Valley’s overall industrial The top notable lease transactions by Average Lease SF/MO (NNN) $0.54 $0.360 vacancy rate in Q3, 2017 was 5.5 percent, size for the quarter were once again primar- Under Construction 3,428,809 375,338 down 0.5 percentage-points from the sec- ily concentrated in the North Valley submar- Planned 5,163,821 1,370,000 ond quarter. Vacancies were down all prod- ket, with four out of the top five transactions INDUSTRIAL/LIGHT INDUSTIAL/MANUFACTURING uct types except for light industrial. The inked within the top contending submarket. Total Square Feet 30,327,286 28,264,985 quarter also saw a large amount of comple- Prologis filled two vacancies in Stead Vacant Square Feet 1,047,540 709,340 tions. The Valley’s industrial market remains with Big Rock Sports leasing 96,000 square healthy and continues to grow. feet and National Business Furniture leas- Percent Vacant 3.5% 2.51% Q3, 2017 saw 2.3 million square feet ing 79,300 square feet. GLP signed 3PL New Construction 0 0 completed in six projects, all of it in the provider Fulfillment Works to 88,000 square Net Absorption -49,163 46,835 warehouse/distribution product type. This feet and, next door, local developer Mcken- Average Lease SF/MO (NNN) $0.73 $0.390 was another strong quarter for completions zie Properties leased the first of their two Under Construction 83,411 2,000,000 after a slow start in Q1. With over 3.5 mil- newly completed standalone buildings with Planned 30,897 5,700,000 lion square feet currently under construc- ID Tech Camps taking 61,875 square feet. In tion and another 5.4 million in the planning Sparks, Monsoon Pacific expanded into a R&D/FLEX stages, there is plenty more space coming 77,696 square foot new facility. Total Square Feet 5,885,765 4,281,985 to satisfy the industrial market’s continuing The third quarter of 2017 had an interest- Vacant Square Feet 603,087 352,249 needs. ing trend with no lease transactions that were Percent Vacant 10.2% 8.23% Thanks to the completions, net absorp- over 100,000 square feet, this is one of the New Construction 0 0 tion in Q3, 2017 was almost +2.8 million first quarters since 2015 that this has occured. Net Absorption 37,604 65,178 square feet. On a year-over-year basis, net Northern Nevada’s industrial market has been absorption was almost +6.6 million square red-hot and currently sits just above a 4 per- Average Lease SF/MO (NNN) $0.99 $0.590 feet. By subtype, warehouse/distribution cent vacancy, with the quarter posting a small Under Construction 0 45,000 accounted for almost all of the absorption amount of negative net absorption. For new Planned 0 DND with +6.0 million square feet. construction, McKenzie Properties completed There were 3.5 million square feet of two buildings totaling 140,000 square feet in NEXT MONTH: OFFICE space under construction in Q3. Fifteen of the North Valley submarket. ABREVIATION KEY the 17 projects comprising this space are The quarter’s largest investment trans- MGFS: Modified Gross Full-Service of the warehouse/distribution variety and actions included a 50,585-square foot stor- SF/MO: Square Foot Per Month five of those projects are larger than 3 mil- age facility, which sold for $3,450,000 or NNN: Net Net Net lion square feet. Q3 ended with 5.4 million $68.20 per square foot. In the Reno mar- square feet of planned Industrial space. ket, there was a multi-parcel sale, a total of Southern Nevada analysis and statistics compiled by Nineteen of the 23 planned projects are 62,903 square feet, which sold for $3.8 mil- RCG Economics, Northern Nevada analysis and warehouse/distribution space, as well. lion or $60.41 per square foot. statistics compiled by Dickson Commercial Group.

100 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Business Indicators DATA GROWTH he “third” estimate for U.S. real gross NEVADA DATE UNITS LATEST PREVIOUS YEAR AGO RECENT YEAR AGO COMMENTS domestic product (GDP) for the sec- Employment 2017M08 000s, SA 1347.90 1345.2 1309.1 0.2% 3.0% Up Over Year Ago ond quarter of 2017 was revised upward to a 3.1 percent annualized rate, Unemployment Rate* 2017M08 %, SA 4.9 4.8 5.5 0.1% -0.6% Down From Year Ago which is 0.1 percentage point higher Taxable Sales 2017M07 $billion 4.697 5.110 4.460 -8.1% 5.3% Up Over Year Ago than the “second” estimate. The upward revision T Gaming Revenue 2017M08 $million 989.51 997.97 861.15 -0.8% 14.9% Up Strongly Year-Over-Year reflected a slightly higher increase in private in- ventory investment than previously thought. U.S. Passengers 2017M08 million persons 4.670 4.758 4.478 -1.9% 4.3% Up Over Year Ago nonfarm employment lost 33,000 jobs, which Gasoline Sales 2017M07 million gallons 108.9 105.5 106 3.2% 2.3% Up Over Year Ago is the first job loss in seven years. The negative growth mainly reflected a large 105,000 payroll drop in food services and drinking places due to CLARK COUNTY Hurricanes Harvey and Irma. The average hourly earnings accelerated to the fastest yearly rate Employment 2017M08 000s, SA 982.2 978.0 953.8 0.4% 3.0% Up Over Year Ago since 2009, up by 2.9 percent. The unemploy- Unemployment Rate* 2017M08 %, Smoothed SA 5.2 5.1 5.6 0.1% -0.4% Down From Year Ago ment rate, however, fell to 4.2 percent, a 16-year low. The Federal Reserve started to shrink its Taxable Sales 2017M07 $billion 3.339 3.613 3.264 -7.6% 2.3% Up Over Year Ago $4.5 trillion balance sheet in October by reduc- Gaming Revenue 2017M08 $million 841.59 848.56 724.75 -0.8% 16.1% Up Strongly From Year Ago ing its bond and mortgage-backed security hold- Residential Permits 2017M06 units permitted 1399 1177 1260 18.9% 11.0% Up Over Year Ago ings, which could promote small hikes in mid-and long-term interest rates. Commercial Permits 2017M02 permits 29 32 43 -9.4% -32.6% Low and Volatile Nevada posted generally positive signals in Passengers 2017M08 million persons 4.245 4.326 4.098 -1.9% 3.6% Up Over Year Ago its economic activity based on the most recent data. Seasonally adjusted statewide employ- Gasoline Sales 2017M07 million gallons 73.95 72.00 72.63 2.7% 1.8% Up Over Year Ago ment added 2,700 jobs in August and posted Visitor Volume 2017M08 million persons 3.839 4.109 3.899 -6.6% -1.5% Down From Year Ago the largest percentage annual statewide growth of any state, up by 3.0 percent. Taxable sales in WASHOE COUNTY July experienced a robust 5.3 percent year-over- Employment ** 2017M08 000s, SA 226.4 226.4 222.2 0.0% 1.9% Up Over Year Ago year gain, boosted by both the Reno-Tahoe In- Unemployment Rate* 2017M08 %, Smoothed SA 4.2 4.2 4.9 0.0% -0.7% Down From Year Ago dustrial Center (TRIC) and higher-than-expected first month sales of recreational marijuana. July Taxable Sales 2017M07 $billion 0.794 0.919 0.699 -13.6% 13.6% Up Strongly From Year Ago gasoline sales (in gallons) also increased by 2.3 Gaming Revenue 2017M08 $million 77.25 77.86 70.15 -0.8% 10.1% Up Over Year Ago percent during the same period. August gaming revenue surged by 14.9 percent. Residential Permits 2017M08 units permitted 461 574 364 -19.7% 26.6% Up Over Year Ago For Clark County, somewhat positive sig- Commercial Permits 2017M08 permits 37 52 41 -28.8% -9.8% Low and Volatile nals emerged with the latest data. Seasonally Passengers 2017M08 million persons 0.393 0.401 0.350 -1.8% 12.4% Up Strongly Year-Over-Year adjusted employment added 4,200 jobs from July to August. August visitor volume for Clark Gasoline Sales 2017M07 million gallons 16.18 15.53 15.68 4.1% 3.2% Up Over Year Ago County continued its year-over-year loss, down Visitor Volume 2017M07 million persons 0.515 0.484 0.476 6.6% 8.3% Up Over Year Ago by 1.5 percent, while total McCarran passengers climbed by 3.6 percent during the same period. UNITED STATES

August gaming revenue jumped by 16.1 percent Employment 2017M09 million, SA 146.659 146.692 144.882 -0.02% 1.2% Up Over Year Ago from last year. Clark County taxable sales for July increased by 2.3 percent from a year ago. Gaso- Unemployment Rate 2017M09 %, SA 4.2 4.4 4.9 -0.2% -0.7% Reduced line sales grew by 1.8 percent during the same Consumer Price Index 2017M08 82-84=100, SA 245.0 244.0 240.4 0.4% 1.9% Up Over Year Ago period. June residential housing permits gained Core CPI 2017M08 82-84=100, SA 252.5 251.9 248.4 0.2% 1.7% Up Over Year Ago 11.0 percent year-over-year. Washoe County experienced highly posi- Employment Cost Index 2017Q2 05.12=100, SA 129.0 128.3 126.0 0.5% 2.4% Increased tive signals in its economic activity. Although the Productivity Index 2017Q2 2009=100, SA 107.7 107.5 106.5 0.2% 1.1% Up Over Year Ago Reno-Sparks seasonally adjusted employment remained unchanged in August, it was up by 1.9 Retail Sales Growth 2017M08 $billion, SA 474.8 475.8 460.2 -0.2% 3.2% Up Over Year Ago

percent from last year. Taxable sales for Washoe Auto and Truck Sales 2017M09 million, SA 18.47 16.02 17.65 15.3% 4.6% Strong Rebound and Storey Counties in July continued to exhibit a sturdy 13.6 percent yearly rise. August gaming Housing Starts 2017M08 million, SA 1.180 1.190 1.164 -0.8% 1.4% Up Over Year Ago revenue and air passengers gained 10.1 and 12.4 Real GDP Growth*** 2017Q2 2009$billion, SA 17031.1 16903.2 16663.5 3.1% 2.2% Strong Rebound percent, respectively, year-over-year. Residential U.S. Dollar 2017M09 97.01=100 118.139 119.285 121.776 -1.0% -3.0% Down From Year Ago housing permits in July rose substantially by 26.6 2017M08 $billion, SA -42.395 -43.558 -41.130 Year-Over-Year percent from last year. Trade Balance -2.7% 3.1% Deficit Increase

S and P 500 2017M09 monthly close 2519.36 2471.65 2168.27 1.9% 16.2% Up Strongly From Year Ago

Real Short-term Rates* 2017M09 %, NSA -1.67 -1.59 -2.11 -0.08% 0.4% Up Over Year Ago Stephen M. Miller, Director Treasury Yield Spread 2017M09 %, NSA 1.17 1.20 1.34 -0.03% -0.2% Slight Decrease Jinju Lee, Economic Analyst *Growth data represent change in the percentage rate, **Reflects the Reno-Sparks MSA which includes Washoe and Storey Counties, ***Recent growth is an annualized rate UNLV Center for Business Sources: Nevada Department of Taxation; Nevada Department of Employment, Training, and Rehabilitation; UNR Bureau of and Economic Research Business and Economic Research; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/Tahoe International Airport; Las Vegas Convention and Visitors Authority; Reno-Sparks Convention and Visitors Authority; U.S. Department The views expressed are those of the authors and do not of Commerce; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Federal Reserve System. necessarily represent those of the University of Nevada, Las Vegas or the Nevada System of Higher Education. Note: NSA = Not Seasonally Adjusted, SA = Seasonally Adjusted

NOVEMBER 2017 NEVADA BUSINESS MAGAZINE 101 Last Word

“I am truly thankful for the great relationships and friendships I make “[I’m thankful for] my “[I’m thankful for] each season. Working support system of family my son! I can have the in this business allows and friends, the strength most stressful day and me to meet the best and compassion of our then when I see him, he young adults, whom we amazing community, inevitably will make me employ, and some great the brutal honesty and smile. Who can resist families that live in silliness of my kiddos, smiling at a 5 year old the surrounding areas. digital cameras to capture reenacting his favorite Cowabunga Bay is thrilled memories, laughter, tears scene from the Batman to be part of such a great and the healing power of Lego movie?” community.” music.”

Jennifer Braster | Managing Partner Shane Huish | Owner Chelle Adams | Chief Financial Officer Naylor & Braster Attorneys at Law Cowabunga Bay Waterpark The Cosmopolitan of Las Vegas

What are you most thankful for?

Patrick Lindsey | Tournament Director Ercan Aydogdu | Executive Director Anthony P. Rufo | president Shriners Hospitals for Children Open Coral Academy of Science Las Vegas Happie Home, LLC

“I’m most thankful for “I am thankful for the “[I’m thankful for] my my wife and two sons. dedicated, passionate personal relationship Their smiles light up my educators that Coral with the Lord, and his days and inspire me to Academy has attracted. grace and blessings in give 100 percent for them I am truly amazed by my life, the gift of my and to our PGA TOUR our students’ level of wife, daughter and our event. Thank you, Kris, academic excellence and grandson, Hope Church Wes and Caleb!” demonstrated sense of and the software company responsibility.” we birthed from here in Las Vegas.”

102 NEVADA BUSINESS MAGAZINE NOVEMBER 2017 NEVADABUSINESS.COM Connecting Communities For Over 50 Years

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