When businessman John Dermody accepted the Nevada franchise for the Philco Appliance Company and relocated his family to Reno in 1950, little did anyone suspect that this move would be the catalyst that created a successful industrial development company, Dermody Properties.
Appliances after World War II were like cell phones are today… consumers couldn’t get enough of them. Technology and styles were changing daily. After building a successful appliance business in Northern Nevada, Dermody sold it in 1960, but kept the building and became a landlord. His goal was to slow down. In fact, he moved his family in Europe for a year. But the calm didn’t last, as he turned his attention to real estate in Nevada.
To increase revenue, the State of Nevada, envisioning Northern Nevada as a Western US distribution hub, had passed the Freeport Law in 1949. This law exempted taxation on goods warehoused in Nevada. More significantly, California did not have this law and it taxed goods.
Soon John Dermody, along with other developers and landowners in the region, seized the opportunity and focused on Northern Nevada as a geographical hub for warehousing and distribution in the Western states. The industry grew quickly, attracting a diversity of companies. Dermody, a charismatic salesman, had soon recruited the first New York Stock Exchange company, Bigelow Carpet, to Reno/Sparks in the early 1960s.
In the appliance business, Dermody had developed strong business networks statewide. It was only natural in 1974, for his company, John A. Dermody, Inc., to bring a public warehousing customer to North Las Vegas, into a building that still stands today.
In 1976 Michael Dermody joined his father’s successful two-man company. Although their careers would take different paths and Michael would buy out his father’s interest in the company in 1990, he and his father would work in the same offices together for more than 30 years.
In 1982, Michael Dermody became president of the company and took it in a broader direction, with what would become a trademark focus on customer service and also speculative development. The company was renamed Dermody Properties to reflect the broader business initiatives.
Michael began to vertically integrate the company and, in 1978, he created United Construction Company with key partners. United Construction soon grew beyond the Dermody Properties customer base, and began serving national clients.
At that time, Dermody Properties also developed its first speculative building. Reno/Sparks was growing into one of the premier industrial locations in the country, with the highest industrial square footage per capita. It was only natural to have Dermody Properties capitalize upon this scenario for greater growth.
After the recession of 1981, with fewer developers in the marketplace, the company increased local market share by 50 percent, which was made possible through its one-stop shopping approach. Dermody could now provide “under one roof” leasing, land, financing and construction.
In 1990, Michael Dermody saw the need for a strong, balanced financial platform to support the company’s growth, and so aligned with the California Public Employees’ Retirement System (CalPERS), the largest public pension plan in America. This general partnership was ahead of its time, for a local, private development company like Dermody Properties, to partner with a large public pension fund. To broaden their financial model, he formed additional alliances with other major partners, including Lazard Frères & Co.
In 1992 Dermody was approached to take the company public, and even got as far as printing his S-11, but ultimately chose not to move forward. He preferred to remain privately held, which allowed the company to be able to better serve its clients and communities. Finally, in 2003 the company rolled up its entire portfolio into a new partnership with the California State Teachers Retirement Fund (CalSTRS).
These institutional partnerships were the springboard for the explosive growth that would occur during the 1990s and early part of the next millennium.
In 2004, understanding that the flow of logistics is the core of industrial development, Dermody Properties developed the LogistiCenter concept. Today, LogistiCenter is a national trademarked brand, owned by Dermody Properties. It represents the firm’s business philosophy of developing distribution facilities that meet the supply-chain requirements of companies.
In 2007 Dermody Properties made national news when it sold its portfolio of 25 million square feet to ProLogis. This transaction, in retrospect, would be viewed as especially iconic, given the unanticipated national economic recession that would begin within a few months. Dermody gives credit to his team who moved with unparalleled speed to be under contract with the buyer within two months.
After the sale, the company retained 500 plus acres to continue development. Dermody had the opportunity to slow down, but refused, and instead drew upon his 30 years of industrial development experience to create a new national team. This team is comprised of regional partners, based in markets where they had proven success. The company developed over 5 million square feet between 2007 and 2010, which was unique in that challenging environment.
Today, the company continues its national development reach, with corporate offices in Reno, and regional offices in Chicago, Philadelphia, Phoenix and Portland. Currently the company has more than $100 million in projects under development in Pennsylvania, New Jersey, Illinois, Kentucky and Nevada, and expects to add several new markets in 2014.
The team continues to expand and pursue opportunities for development across the nation. The most recent acquisitions have occurred in Carlisle, Penn., McCook, Ill. (in the Chicago area), Louisville, Ky., and most significantly, in Northern Nevada.
At the new LogistiCenter 395 in Reno, Dermody Properties has broken ground in its 91-acre industrial park, the first phase being a 624,000 square-foot warehouse/distribution facility. It will be the first major development of its scale in Nevada since 2008. The facility is scheduled to be completed in 2014 and United Construction Company will construct the project.
“Nevada is where we started. We are proud of our roots, and also our national footprint,” said Dermody. “We are a private business, and recognize that our success is due to the team members and communities who have supported us and who have allowed us to serve them.”