Market Reports

Tourism to Operations: Reno’s Robust Industrial Market

by Jeff Shaw December 1, 2023

— By Justin Basie President of Real Estate, Mark IV Capital — While the Reno-Sparks Metropolitan Statistical Area (MSA) is best known for its gaming-tourism industry, its location in Northern Nevada also appeals to fans of the outdoors. In addition, Reno’s diversified economy readily attracts Fortune 500 companies that are targeting the area for their manufacturing and distribution efforts. This, in turn, drives the massive growth of Northern Nevada’s industrial sector, generating overwhelming demand for warehouse, logistics and manufacturing space in the region. The following fundamentals have positioned Northern Nevada and the Reno-Sparks MSA as ideal destinations for logistics, manufacturing and other industrial activities: • Population Proximity The MSA is conveniently located within a one-day trip of major West Coast cities like Los Angeles, San Francisco and Portland, Ore. Thanks to an efficient infrastructure network that includes major highways, two railways and the Reno-Tahoe International Airport, companies can reach a vast 80 percent of the Western U.S. population in less than 24 hours. • Business-Friendly Climate Nevada is consistently ranked as a top 10 state for conducting business because of its pro-business regulatory environment, low-cost start-up fees, and streamlined licensing and approval processes. Nevada also offers a favorable tax environment for …

December 1, 2023

Industrial Market Reports Nevada Western Western Market Reports

Reno-Sparks Industrial Market is Stable, Despite 2023 Headwinds

by Jeff Shaw November 17, 2023

— By Nick Knecht, Vice President, DCG Industrial — The industrial real estate market in Northern Nevada demonstrated stability over the first three quarters of 2023. Sales performance year to date through the third quarter was steady, with industrial sales volume reaching $116 million. This represents a 42 percent increase compared to the same period in 2022. This should keep the market on track for a decent year, despite falling slightly short of its historical averages. Notably, the shift in buyer dynamics caused by the rise in interest rates, which have soared as high as 8 percent, has investors sticking to a more conservative approach to their underwriting. Owner-users have emerged as the primary drivers of sale activity, and were the buyers of all four closed sales in September. Prices are beginning to soften, and price reductions are occurring more frequently, which is expected to improve buying opportunities for investors over the next 12 to 18 months. Leasing activity has been concentrated in the 10,000- to 50,000-square-foot range, which captured 44 percent of the third quarter’s lease transactions, and similarly 38 percent in the 5,000- to 10,000-square-foot range. Lease rates have remained relatively stable since the first quarter, with Class A …

November 17, 2023

Market Reports Multifamily Nevada Western Western Market Reports

Higher-Wage Job Growth Buoys Rent Growth, Continued Development in Reno

by Jeff Shaw November 10, 2023

— By Aiman Noursoultanova, Senior Vice President, CBRE’s Reno Investment Properties Group — Reno’s multifamily sector has performed exceptionally well over the past decade due, in part, to strong, sustained job growth. Nevada continues to lead the nation in employment growth at 3.8 percent over the past year, according to July data from the Bureau of Labor Statistics. While Reno’s job growth over the past decade has focused more on diversification, recent growth can best be characterized by higher-wage industries like healthcare, technology, manufacturing and aerospace/aviation. As a result, the market has seen an influx of new Class A, well-amenitized construction that appeals to this new tenant demographic. Notable company relocations and expansions thus far in 2023 include OMEC Medical, a life sciences instrument manufacturer; Edgecore, a wholesale data center developer, owner and operator; Generac, a leading global designer, manufacturer and provider of energy technology solutions; and Stellar Aviation, a fixed-base private airplane operator catering to private planes and jets. Companies investing in Reno most commonly appreciate the region’s attractive regulatory environment, low cost of doing business, access to regional transportation corridors and a high quality of life for its employees. Regarding rent growth over the past decade, several submarkets have performed …

November 10, 2023

Market Reports Nevada Office Western Western Market Reports

Reno’s Household Growth Boosts its Office Sector

by Jeff Shaw November 3, 2023

— By Daniel A. Kapic, Vice President, Regional Manager, Marcus & Millichap — Reno continues to be one of the nation’s fastest-growing smaller markets, underpinning tenant demand in the office sector. While remote and hybrid work have impacted office use in the metro, market-wide vacancies have kept in decent shape. Entering July 2023, Reno’s 15.1 percent vacancy rate was below the pre-2017 average. Rapid household growth has backstopped space needs, with law, financial and health service providers executing expansions to capture share in a growing market. The local household count increased 2.2 percent year over year in September, which was the second fastest among metros with fewer than 600,000 households. South Reno is spearheading this growth with 14 consecutive quarters of positive apartment net absorption through June 2023, drawing consumer-facing office tenants to the highly developed Meadowood neighborhood. The Reno VA Medical Center — which serves patients as far as Alturas, Calif. — recently announced its relocation to the area, which should also elevate long-term needs for nearby medical office space. While household growth has shored up space demand, Reno’s office market is still recalibrating to a 20-year-high supply injection. Overall inventory expanded 2 percent in the first half of …

November 3, 2023

Market Reports Multifamily Nevada Western Western Market Reports

Las Vegas’ Multifamily Market Is All About Growth, Challenges

by Jeff Shaw July 7, 2023

— By James Hall, ABI Multifamily — It’s been a tumultuous year for global capital markets and asset prices, which have had to contend with a broad array of geopolitical and economic headwinds. The Las Vegas multifamily market — while it remains demographically sound — is dealing with inflationary-based pricing concerns and fundamental characteristics dampening investor appetite.Amongst all the noise and negatively skewed fundamentals, Las Vegas’ economy continues to grow, with tourism surpassing pre-pandemic levels this quarter. Harry Reid Airport reported the highest recorded number of passengers in February, indicating that the market continues to benefit from a surge in post-pandemic domestic tourism.A report released by the Federal Funds Information for States ranked Nevada as first in the nation for economic growth and momentum last year. The measurement considers a wide array of key economic and demographic indicators, including population, personal income and employment growth.While California continues to reel from a declining population, both Nevada and Arizona are benefiting from a surge in net-migration. The population of Las Vegas is expected to double by 2060, which would add an additional 2 million residents to the MSA, per Woods and Poole Economics..Las Vegas residents have a much higher propensity to rent …

July 7, 2023

Healthcare Industrial Market Reports Nevada Western Western Market Reports

Las Vegas Industrial Remains Resilient with Record-Low Vacancy Rates

by Jeff Shaw June 30, 2023

— By Jerry Doty, Senior Vice President, Colliers — Las Vegas was once known only for its flashy casinos and luxurious hotels, but over the past several years, it has become a growing distribution hub for the entire West Coast. Las Vegas is situated at the intersection of several major highways, making it an ideal location for businesses that need to move goods quickly and efficiently. The city’s proximity to the ports of Los Angeles and Long Beach also make it a gateway for goods entering and leaving the United States. Our industrial market has had an epic rise in recent years, and up until the recent economic shake-up with rising interest rates and uncertainty in the capital markets, there was no end in sight. We continue to ask ourselves if 2023 will be the year things finally slow down or, even worse, take a step back. First, the good news. One of the most striking statistics about the Las Vegas industrial market is the extremely low vacancy rate. Despite delivering about 8.5 million square feet over the previous five quarters, we still sit at a near record-low overall vacancy of 1.5 percent for the first quarter of 2023. Even …

June 30, 2023

Market Reports Nevada Retail Western Western Market Reports

Las Vegas Retail Remains a Strong Investment

by Jeff Shaw June 23, 2023

— By Todd Manning, Managing Broker, NAI Vegas, and Maria Herman, Senior Vice President, Retail Division, NAI Vegas — The Las Vegas retail market continues to perform well into 2023 despite a few headwinds (and headlines) dogging the industry. The success is due in part to Las Vegas continuing to experience strong growth coming out of the pandemic years. For example, visitor volume to Las Vegas reached more than 3 million people in February 2023, which was up 17.8 percent year over year, but was still down 3.4 percent from February 2019. Speaking of performing well, Las Vegas’ retail vacancy rate has been holding steady at around 5.2 percent, just slightly lower than it was a year ago. It is also the market’s lowest retail vacancy rate in over 15 years. Rent growth is slowing, however, and is down from the 10.4 percent gains of one year ago. Rent growth has been another bright spot for Las Vegas retail landlords as rates continue to increase at 7.7 percent year over year. Rent growth is slowing, however, and is down from the 10.4 percent gains from a year ago. Not surprisingly, the investment market for commercial property, retail included, has experienced …

June 23, 2023

Market Reports Nevada Office Western Western Market Reports

Las Vegas Office Market Dynamics are Driven by Convenience, Quality

by Jeff Shaw June 16, 2023

— By Dan Palmeri, Senior Vice President, CBRE — As Las Vegas reinvents itself as the sports and entertainment capital of the world — while still maintaining the fun factor it has always been known for — the corporate world continues to look at Southern Nevada as a legitimate place to do business. The city saw a record number of Class A deliveries in 2022 and has shown no signs of slowing down through 2023. This is a reflection of the demand for new, functional and relevant office space. Like most markets, location and quality of buildings are the main drivers for employers as they focus on employee happiness and retention. As Las Vegas has grown from a small desert town in the ‘70s and ‘80s with 505,000 residents in 1983, to a market of more than 2.3 million residents today, the natural geographical growth outward has hit a point where the city has reached the Valley’s boundaries in all directions. What was once a five- to 10-minute commute to the center of town has now become a 20- to 30-minute commute for the mass of suburban dwellers. This has organically led to a focus on a 25-mile stretch from …

June 16, 2023

Market Reports Multifamily Nevada Western Western Market Reports

Reno Multifamily Market Soars to New Heights in Past Decade

by Jeff Shaw May 12, 2023

— By Aiman Noursoultanova, Senior Vice President, CBRE — Reno has become an increasingly attractive market over the past decade for multifamily investors due to its continued strong performance, fueled by a desirable business and regulatory climate. Rents have doubled since 2013, while vacancy has continued to remain healthy despite robust construction activity. Multifamily investors took notice once noteworthy companies like Apple, Google, Microsoft and Tesla began to increase their investments in the region. Strong Population, Job Growth Fuel Investment Reno’s population grew by 15.3 percent in the past decade. The area is projected to see 51.6 percent population growth by 2060, the 40th highest of all 384 U.S. metro areas, according to Washington D.C.-based economic and demographic data firm Woods & Poole Economics. As a testament to the area’s growth, the Reno-Tahoe International Airport recently announced a $500 million development and expansion project to accommodate airport traffic. The area’s rise in population is attributed primarily to job growth and a desirable quality of life. This started with Tesla’s initial Gigafactory investment in the region, then continued with Apple’s 1.1-million-square-foot data center campus. Google also purchased 1,210 acres and plans for a future data center development. Meanwhile, Tesla announced a $3.6 …

May 12, 2023

Market Reports Nevada Retail Western Western Market Reports

Northern Nevada Retail Market Sees New Tenants, Significant Development

by Jeff Shaw May 5, 2023

— By Tad Loran, Vice President, Retail Specialist, Avison Young | Western Alliance Commercial — The Northern Nevada retail market has been performing well. New tenants are entering the marketplace and the area experienced positive absorption. Rental rates have increased for the year, but there has been a decrease in commercial sales due to higher interest rates. The retail vacancy rate is currently at 4.7 percent, while asking rental rates are at $1.70 per square foot on a monthly basis. Many submarkets have shown improvement, including South Virginia, Meadowood, South Reno and the North Valleys. Tenants that have recently entered or are expanding in Northern Nevada include Colombia Sportswear, Voodoo Brewing Company, Jamba Juice, the Human Bean, Starbucks, Cracker Barrel, Mountain Mike Pizza, Pet Station, Take 5 Oil Change, AutoZone and Five Below. Tenants with closures include Bed Bath & Beyond, Sizzler Steakhouse, Food Source Grocery Store, Campo, California Pizza Kitchen, Long John Silver’s, Rounds Bakery and Claim Jumper. Unemployment in Nevada fell to 3.4 percent in December 2022. This low unemployment rate has led some prospective new businesses to either delay or cancel expansion plans in this region. From a development perspective, Reno has many new projects in the …

May 5, 2023

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