Retailers: Consumers are continuing to reopen wallets

Within the first months after Reno Running Company opened in 5,000 square feet at The Summit, the specialty retailer got a great response from the regional running community, says Aimee Balzer, who opened the store with her husband, Matt.

Now Reno Running Company, like other small and large retailers in the Truckee Meadows, is projected to get an additional boost from continued economic recovery in northern Nevada.

Balzer says she wasn't apprehensive about entering the retail market at a time when many small business and restaurants have folded.

"Given our area and our geographical location, there are always gong to be people running and hiking. It's one of the cheapest sports, given the economy," she says. "I hope and believe that our economy will get stronger in 2012, especially the local businesses. People like to stay local and help support and grow our community. If we keep our money here it will provide more opportunity and more growth."

Retailers at The Summit benefit from strong occupancy 93 percent says Larry Hunt, regional general manager for Bayer Properties, which manages The Summit.

Hunt says retailers have reported a rise in sales throughout 2011, as well as increased foot traffic. Retailers also are reporting that holiday shoppers spent more money on themselves than in the past few years, Hunt says, which points to an gradual rise in total sales for the coming year.

"It seems the customer has become more indulgent, and many of the purchases this year are for themselves," Hunt says. "People are spending more money on others and themselves stores tell us that people come in to buy gifts, and they will also purchase two or three things they would like to have."

Eight new stores opened in The Summit in 2011. Hunt says Bayer Properties is negotiating with several new stores and should announce new tenants to The Summit in early spring.

Other south Reno shopping centers also report a favorable 2011 and are hopeful that 2012 continues that trend.

Todd McKenzie, principal with McKenzie Properties, says the development and property-management company expects to have a record year in 2012. Tenants at McKenzie's flagship retail property, South Creek at South Virginia Street and Foothill Drive, are averaging sales of $375 per square foot, McKenzie says, much better than the benchmark of $300 per square foot that many developers consider healthy.

Three new restaurants opened in South Creek in 2011: Los Compadres, Squeeze Inn and Yosh's Unique Deli.

South Creek has just 1,138 square feet of vacant space, and McKenzie expects to begin development of two additional buildings totaling 12,200 square feet early in 2012.

"Overall, inquiry activity has been strong, especially for restaurants," he says. "We only have one or two spaces open for restaurants, and we are going to be very selective.

McKenzie Properties in recent weeks also purchased Las Brisas Pavilion, a 14,000-square-foot strip center in northwest Reno with four businesses and 30 percent vacancy. McKenzie says his company will seek additional purchase opportunities throughout 2012 due to favorable pricing for existing retail product that trumps new building costs.

"Our business model has always been to develop raw land, but in this market prices are so attract that we are definitely looking to purchase existing buildings. There are lot of properties that are distressed price-wise, and what we can buy for is way less than the cost of developing," he says.

Key additions also should drive consumers to Legends at Sparks Marina, which opened to much fanfare in June of 2009. The troubled regional economy doomed several small stores and eateries at the large development, but the additional of a long-awaited IMAX movie theater and major retailers should help the center, says Legends General Manager Dennis McGovern.

Discount Tire recently opened, a new Lowe's is slated to open Feb. 3, and Old Navy Outlet and T.J. Maxx stores should be open by summer's end, McGovern says. By the end of the first quarter, McGovern expects an additional 250,000 square feet of new development at Legends.

"If we look at when we opened in 2009, there were very few positive growth highlights," McGovern says. "But for 2011, it appears that nine of 11 months showed positive growth over 2010. That is a trend that the center is up."

Bids are still open on construction of the IMAX theater, which will be managed by Galaxy Theaters. The theater should be crucial in driving traffic to other businesses at Legends, McGovern says. Although the center is poised for a solid year in 2012, don't expect magic sales number, McGovern cautions.

"At least for the first half of the year, our predictions are very similar for the first half 2011, which saw small increases but there were increases."