Reno Retail Makes a Favorable Comeback After a Devastating 2020
By Tad Loran, Vice President, Retail Specialist, Avison Young | Western Alliance Commercial Inc.
The Reno retail market was hard hit overall by the pandemic, with the service industry at the top of the list. Some notable businesses that closed in Reno last year include Santa Fe Basque Restaurant, Truckee River Bar & Grill, An — Asian Kitchen & Bar, Little Nugget Diner, True NY Pizza Co., Rounds Bakery Storefront, Jos A. Bank, St. James Infirmary, 24 Hour Fitness and Pier 1 Imports. Big box national retailers picked up virtually no new space in 2020.
The good news is retail demand and leasing activity has rebounded this year. Northern Nevada’s retail vacancy rate saw positive absorption. It currently sits at 5.8 percent, while asking rental rates have increased. They are currently at $19.08 per square foot (triple net) on an annual basis for second-generation space and $42 per square foot (triple net) on an annual basis for new construction. Notable business openings this year include Sport Clips, the Human Bean, C-A-L Ranch, In-N-Out Burger, Starbucks, Chipotle, Firehouse Subs, Truckee Bagel, Base Camp Pizza, SUP and Chase Bank.
Commercial sales in Northern Nevada were nominal in 2020. This was driven by the pandemic, a lack of inventory and sellers’ aggressive cap rates. This year, retail sales are seeing the most activity from California-based investor capital. Until more inventory comes online, the Reno sales market will likely continue to see increases in pricing and activity will remain slow.
From a development perspective, Reno now has many new projects in the pipeline.
Notable new construction projects include:
• Reno Experience District (RED). This former Park Lane Mall site is anticipated to include 70,000 square feet of retail, about 1,700 apartments and a tech campus. Completion is TBD.
• The Village at Rancharrah. This is a mixed-use project on a 141-acre site with completion expected in 2022.
• Keystone Commons. This new development’s construction is underway, with completion scheduled for 2022. It is located on the northeast side of the Keystone and W. 5th Street intersection. Notable tenants include In-N-Out Burger, Starbucks, Chipotle and Firehouse Subs.
• Neon District. This multi-phase redevelopment project will help revitalize downtown Reno. It aims to turn this area into a tourist destination that will include retail. It is being developed by Jacobs Entertainment. Completion is TBD.
• SkyPointe. This is a planned development in south Reno that will include retail and office. The developer is McKenzie Properties and completion is TBD.
• Double R Marketplace. Located in south Reno, this planned development will be a retail shopping center totaling about 45,000 square feet. Completion is TBD.
We believe Reno’s retail market will continue to be strong in 2022. Retailers will look to expand, while new developments will be in various stages of planning and construction. The retail sector will benefit as more businesses and people continue to move into Northern Nevada. This was spurred, in part, by the area’s large distribution centers, including Tesla’s Gigafactory, Switch, Apple, Blockchains and Google.