— By Tad Loran, Vice President, Retail Specialist, Avison Young | Western Alliance Commercial Inc. —
The Northern Nevada retail sector has made quite a comeback post-pandemic as both the population and job market expand.
The retail vacancy rate ended last year at 4.7 percent and increased 20 basis points to a current level of 4.9 percent, while market rent increased from $1.70 to $1.83 on a monthly basis for the same period. South Virginia, Meadowood, South Reno and the North Valleys are all recipients of a thriving market. Tenants that have recently entered the region or are expanding in Northern Nevada include Petco, Panera Bread, Colombia Sportswear, Voodoo Brewing Company, the Human Bean, Starbucks, Cracker Barrel, Mountain Mike Pizza, Take 5 Oil Change, AutoZone and Five Below. Tenants with recent closures include Bed Bath & Beyond, Lucky Brand Jeans, Tuesday Morning, Steak ‘n Shake, Sizzler Steakhouse and Claim Jumper.
Unemployment in Nevada increased to 4.4 percent in July 2023 from 3.5 percent in December 2022. Even though there was an increase, this continued low unemployment rate has created a challenging labor market with employers lacking the necessary labor pool to grow. Unfortunately, this shortage has led to some prospective new businesses considering this region to either delay or cancel expansion plans.
From a development perspective, Reno has many new projects in the pipeline, some notable new construction projects include:
• Grand Sierra Resort: The Grand Sierra Resort has outlined plans for a $1 billion expansion, the largest private capital investment in Reno’s history. The new arena spanning 300,000 square feet with a capacity of more than 10,000 will be able to accommodate events like concerts, basketball games, and other sporting and special events. Plans are also in place for an 800-room hotel, new parking garage and 300 riverfront residential units. Construction is expected to break ground in 2024.
• Reno Experience District (RED): The former Park Lane Mall site is expected to ultimately include 65,000 square feet of retail space, about 1,300 new residential apartments, RED’s Element Hotel (now open with 170 hotel rooms) and a tech campus. Completion is to be determined.
• Neon District: This multi-phase redevelopment project will help revitalize downtown Reno and aims to turn this area into a tourist destination to include retail. Jacobs Entertainment is the developer, and a completion date is yet to be determined.
• University Crossing Shopping Center: Located in downtown Reno on the southwest corner of North Virginia and Maple streets, this 6,559-square-foot multi-tenant building will include general retail and restaurant options. Jimmy John’s will be relocating into this center from its 9th Street location.
• SkyPointe: This is a planned development in south Reno that will include retail and office. The developer, McKenzie Properties, is expecting to break ground in 2023 with completion date not yet determined.
• Double R Marketplace: Located in south Reno, this planned development will be a shopping center totaling about 45,000 square feet. This is a proposed development with construction expected to break ground in 2024.
Finishing out this year and into 2024, we anticipate that the Northern Nevada retail market will continue to experience growth. The fundamentals remain robust and this region is continuing to attract tourism; business expansion, including large distribution centers for Tesla’s Gigafactory, Switch, Apple, Blockchain and Google; and retailers. New retail development and revitalization projects remain in demand due to these positive market indicators, making us encouraged and excited to see what next year will bring.