The office market in Reno-Sparks is off to a steady start in 2017, according to report released today by Colliers International in Reno.
The office vacancy rate in the market is still healthy and trending downward at 13.1 percent for total vacancy and 12.3 percent when sublease space is removed, the report says.
Details include:
• Vacancy rates remain healthy with a downward trend at 13.1 percent;
• The market saw negative net absorption of 10,468 square feet;
• Office construction is on the rise with 15,316 sf completed in the first quarter
There are a number of tenants in the market and many are expanding so Colliers anticipates the absorption will definitely be cancelled out next quarter, if not, the market will be ahead year to date. In addition, the average asking rental rate is at a healthy $1.61 per square foot per month full service. This number may not represent the true average since many of the properties, especially in the Meadowood Submarket do not disclose an asking price but from inked deals, Colliers report said, those rates are well in the $2.00 per square foot full service range.
Do to a renovation of Colliers' database to achieve more accurate and up to date information, data for the first quarter is more difficult to compare to previous quarters, according to the report summary.
"The Colliers Reno office is proud to have a full time researcher dedicated to delivering accurate data for our clients to show the health of the market as it relates to information that helps our clients make the best real estate decisions," the report stated. "The change in the statistical database was an increase in the buildings we track, as well as eliminating buildings that do not qualify in our set. Our standards include office buildings over 10,000 square feet, excluding medical and government buildings. We now track 228 buildings in six submarkets."
In terms of absorption, the market unfortunately gave back more space than it absorbed but it was a small amount, roughly 10,500 square feet.
Class A buildings registered a positive net absorption of 11,884 square feet, while the market saw negative absorption in Class B buildings at 11,450 and Class C buildings at 10,902 square feet. The South Reno submarket has the greatest absorption with 7,351 positive square feet.
The market saw the 10,719 square foot renewal for Cisco Systems at 9850 Double R. In the Central Reno submarket, the market also saw positive absorption with 5,301 square feet. Two spaces were leased at 675 W Moana for a total of 9,537 square feet, which helped contribute to this absorption.
It is worth noting that due to our new database, some buildings were added to our data, including 1475 Terminal Way within the Central Reno submarket.
Following the Central Reno submarket, was the Downtown submarket that saw 3,513 square feet positive absorption. Downtown had a lot of activity, including a 3,727 square foot lease to Swift Communications (parent company of Northern Nevada Business Weekly) at 50 W. Liberty Street.
Heading south, the South Reno submarket ended the quarter at negative 7,351 square feet. Even with the negative absorption, the market did see activity with a 6,622 square foot lease to the startup software service company CC2BE at 575 Double Eagle. The submarket also saw Legal Match occupy a 7,500 square foot space at 885 Trademark.
Finally, the Meadowood submarket came in last with negative 29,368 square feet absorption mostly due to the give back of tenant’s spaces finally registering. This included 13,000 square feet from Charles Schwab at 5190 Neil Road as well as space at Nev Dex.
Click here to download the full Colliers International First Quarter 2017 Reno Office Report.
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