Multifamily

By Kenneth Blomsterberg, Senior Managing Director of Investments, Marcus & Millichap Reno recorded robust job creation last year. This was bolstered by corporate growth at the Tahoe-Reno Industrial Center in Sparks, which houses Tesla’s Gigafactory, Apple and Switch data centers, in addition to a collection of fulfillment and distribution centers. The standout pace of employment growth supported the strongest rates of net migration and household formation this cycle, increasing local housing demand. With an average mortgage payment for a single-family home hovering around $2,100 per month throughout last year, leasing was the preferred choice among new residents despite rapidly rising rents across all apartment classes. In response, developers finalized 1,350 units in 2019, building on the 1,400 rentals delivered in 2018. Completions during the two-year span were concentrated in southern Reno neighborhoods and Sparks. These are areas where new supply has been well received, evidenced by the submarkets’ low 4 and mid-4 percent Class A vacancy rates as we entered 2020. Investors were also active during the past 12 months, motivated by solid economic growth and historically tight Class C vacancy. Significant demand was registered from outside value-add investors, with California-based buyers accounting for roughly half of total deal flow. …