The deafening roar of jet engines drowned out Reno airport CEO Daren Griffin’s voice inside the new Airway Commerce Center midday on Thursday, its irony not lost on the people who came to celebrate the project’s completion.
Just moments before being interrupted by an airline jet from up high, Griffin described the difficulties of finding the right project for the land due to its proximity to the airport.
“You can see the end of the runway right there,” the Reno-Tahoe International Airport’s Griffin said. “This was difficult land to turn into anything at all.”
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Griffin specifically pointed to “a morass of FAA regulations” that left the property undeveloped for half a century.
The rules ranged from typical restrictions for building height to less obvious requirements such as picking trees that won’t attract birds that could cause bird strikes.
It is no surprise, then, that the land “sat fallow for a long time,” according Par Tolles, CEO of Tolles Development Company.
“The only product that can be built here is industrial,” Tolles said.
“You can’t build houses. You can’t build multifamily (apartments).”
Location a big selling point for Airway Commerce Center
It was 19 months ago when construction started on the Airway Commerce Center .
Located on a 50-acre airport parcel once known as Home Gardens South on the corner of South McCarran Boulevard and Airway Drive, work on the 893,000-square-foot industrial development started in earnest in October 2022.
Since then, the project completed all four buildings, which can accommodate up to 26 businesses depending on the configuration.
Tolles ground lease with the airport is good for 50 years. The developer and the airport did not share the financial terms for the deal.
Currently, the Airway Commerce Center has two confirmed tenants already at the center.
One of the companies is local logistics firm Sierra Airfreight Express. The other is Marvin Windows and Doors, which announced the opening of its new 110,000-square-foot distribution center at the location in June.
Real estate firm CBRE is also negotiating with seven prospective tenants on behalf of Tolles Development Company.
Tolles described the Airway Commerce Center parcel as one of the last great industrial real estate locations within Reno’s McCarran loop, which should make it attractive for companies looking for a distribution hub to serve the western region.
“This is a really, really well located campus,” Tolles said.
“This cuts down on the commute time, it’s close to a great labor force and, obviously, it has great access to the airport.”
Developing during a challenging financial environment
The tenants that fill the Airway Commerce Center in the future will be a key source of economic activity for the area, according to Reno City Councilmember Miguel Martinez.
Tolles is forecasting up to 350 jobs can be supported by the space once it is fully leased out.
Given some of the challenges with the economy since the pandemic, including inflation, projects such as the Airway Commerce Center can help provide stability and opportunity for the community, Martinez added.
“It’s an impactful opportunity for our community that’s going to bring in a bunch of jobs and it’s going to be an economic driver for our region,” Martinez said.
The completion of the Airway Commerce Center also occurs at a tough time for development.
High construction costs combined with higher interest rates has caused many developers to pause projects as they wait out a potential Fed rate cut. Others are canceling projects altogether.
“We really do need interest rates to come down,” Tolles said. “They won’t go back down to where they were, at least in my lifetime … but what the development community needs is certainty.”
“We can operate around interest rates when we know where they’re going to be,” Tolles added.
This article originally appeared on Reno Gazette Journal: Airway Commerce Center marks project completion on challenging airport land
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