— 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 pipeline.
Some notable new construction projects include:
• Reno Experience District (RED): This former Park Lane Mall site is expected to 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.
• Keystone Commons: This new development’s construction is near completion. It is located on the northeast side of Keystone and W 5th Street with notable tenants like In-N-Out Burger, Cracker Barrel, Starbucks, Chipotle and Firehouse Subs.
• Double R Marketplace: Located in south Reno, this planned development will be a retail shopping center totaling about 45,000 square feet. This is a proposed development with an expected completion in 2024.
• SkyPointe: This is a planned development in south Reno that will include retail and office. The developer is McKenzie Properties. It is expected to break ground in 2023 with a completion date not yet 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 commercial retail. The developer is Jacobs Entertainment. A completion date is yet to be determined.
We anticipate that the retail market in 2023 will continue to be strong as retailers remain optimistic. Due to the low retail vacancy rate of 4.7 percent, we will continue to see future retail developments in the area. The retail sector will benefit as more businesses and people continue to move into Northern Nevada. This will be spurred, in part, by the large distribution centers, including Tesla’s Gigafactory, Switch, Apple, Blockchains and Google.