If you try to find an apartment in Reno you’ll quickly realize this isn’t necessarily an easy task. Reno has experienced more than 8 percent rent growth year over year for the past four years. Average rents in the third quarter were $1,174 per month with vacancy at 4.5 percent, according to CoStar. These escalating numbers are due to employment. The Reno-Sparks MSA has grown by 59,700 jobs in the past 10 years, according to the Bureau of Labor Statistics. The Tesla Gigafactory was just the beginning. Google, Apple and Switch are among others that have moved in, bringing thousands of jobs with them. Businesses still like the friendly tax environment, clean air and high quality of life. But while we were adding all those jobs, the number of apartment units added during that time was just 3,802, CoStar notes.
Chris Moton, Dickson Commercial Group
Look around and you will see apartment construction everywhere in Reno. Most is on the outskirts of town where larger land parcels are still available. This includes Sparks, Lemmon Valley, Spanish Springs and South Reno. A few more central infill sites are making headlines. Park Lane by Reno Land Inc. is in the process of adding 1,700 units in the next several years. Jacobs Entertainment has been buying land along 4th Street in Downtown for years and is now breaking ground on an arts and entertainment district that will include several hundred units. Just east of the casino core along 6th Street is a large apartment building, Canyon Flats, which is under construction. This will add 508 beds of student housing for the nearby University of Nevada, Reno (UNR).
Our neighbors to the West, the Golden State, just passed a bill for statewide rent control, pushing more investors to look at Reno. Our absence of rent control, business-friendly landscape and property taxes that do not reassess on sale are some of the reasons investors stay here. As for renters, the high cost of living in California has been a driving force of inflows to Reno for years. More than 450,000 people relocated to Nevada from 2013 to 2017 from California, according to the U.S. Census Bureau. They show no signs of stopping. As businesses bring jobs to the area and net inflows continue to rise, there will be higher demand for apartments. The size of our valley and topography of Northern Nevada prevents the urban sprawl of other markets. These factors and others will keep the Reno multifamily market healthy for years to come.
— By Chris Moton, multifamily specialist, Dickson Commercial Group. This article first appeared in the November 2019 issue of Western Real Estate Business magazine.