2014 Reno-Sparks market office activity was reasonably busy
March 9, 2015
The Greater Reno-Sparks market actually finished the year where it started — with a vacancy rate of 16.2 percent and ending with a vacancy rate of 16.2 percent. The net absorption for the year was an anemic -3,207 square feet. While it may appear nothing happened, the market was reasonably busy.
The first half of the year began with some major tenants vacating the market or downsizing. Alere Medical left South Meadows for Southern California. They vacated 25,000 square feet. Kinross Gold consolidated to Denver, vacating 16,000 square feet in Meadowood. Lastly, AT&T closed its call center on Vassar in the Old Southwest, vacating about 20,000 square feet. In most years, these transactions would have created a hole too big to recover from and the market would have had negative net absorption.
However, as the year went on and with the announcement of Tesla, market sentiment shifted. Two new companies moved into the market in the fourth quarter. Ghost Systems leased 12,000 square feet downtown. In addition, Clear Capital leased 14,000 square feet, also downtown.
On the expansion side of leasing, Great Call added 18,000 square feet to its suite in the Reno Technology Center for a new total of 36,000 square feet. Stantec expanded into the entire BJG building, bringing its total square feet to 19,000.
And lastly, Saint Mary's Hospital doubled its size in Spanish Springs to 11,000 square feet at 5070 Ion Drive.
Some of the major relocations during the year included Prime Health Care moving into 11,000 square feet at 343 Elm Street on the Saint Mary's campus. Aerion left the airport area for a 9,000 square foot office on the fifth floor of the US Bank building in Meadowood.
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Wimmer Solution moved from the Damonte Ranch area into Meadowood, leasing 10,700 square feet in 6160 Plumas. Lastly, ReMax relocated to the second floor of Bank of America Building on South Virginia in Meadowood.
Office construction could have set a new low with just a couple of new garden office buildings being built. On the positive side, existing landlords have been making improvement to their buildings. Lobbies are being upgraded. Much more glass is being used to make office entrances more attractive.
Tenants have shifted from being totally cost conscious to recruiting and retention focused.
The other significant shift is the number of firms wanting to relocate downtown. It could be the increased retail and restaurant presence of Midtown or a move to a more urban look and feel. Either way, the downtown landlords are benefitting.
The two largest buildings downtown, Bank of America Plaza and Museum Tower, are both over 90 percent occupancy.