RENO, Nev. — One of the most highly trafficked retail centers in Reno is searching for a new anchor tenant, and the owner of the property says he's content to wait for just the right fit in order to land someone who lifts the tide of other retailers at the center.
K Corporation of Incline Village in September purchased the 31,400-square-foot space currently occupied by Goodwill at The Crossing at Meadowood Square.
Goodwill was scheduled to exit the space in October after a decade-long occupancy. K Corp. previously purchased the line space surrounding Goodwill in 2014 and has since completed extensive façade remodeling and other improvements to certain properties, with additional renovation plans in the works.
Existing retailers at the Crossing at Meadowood Square include FedEx Office, Nevada Home Fitness, Ocean Spa and Nails, Blind Onion Pizza & Pub and South Town Barbers, among others.
Goodwill had been the largest retailer at the Crossing, and when it leased the space in the doldrums of the Great Recession, retail vacancies were soaring as a multitude of big box retailers either vacated the area or folded up shop completely.
The retail landscape in Northern Nevada has shifted considerably since. Market research by Dickson Commercial Group pegs regional retail vacancy at a respectable 5.8 percent in the second quarter of 2019, with strip center vacancy a few ticks lower at 5.4 percent.
Notable sales for the quarter include the Goodwill site ($4.45 million), as well as purchase of the 81,247-square-foot Evergreen Plaza on Oddie Boulevard ($5.9 million), the 39,184-square-foot University Village Center on Clear Acre Lane ($7.6 million) and sale of Cabela's at Boomtown to a private real estate investment firm in San Francisco that purchased 11 Cabela's locations for $324 million. The Reno location went for $26.2 million.
Goodwill's departure from the center — Goodwill is relocating within the city, a source confirmed to the NNBV, to a to-be-announced location — and creates a unique opportunity to position a premier retailer in a prime location, says K Corporation President James Kaplan. More than 22,500 cars a day travel past the center on Neil Road, while 24,000 vehicles pass by on Virginia Street, the Crossing notes on its web site.
“It's one of the busiest intersections in Northern Nevada,” Kaplan says. “The only Whole Foods in all of Northern Nevada is across the street, and the only Class-A Simon mall (Meadowood) is just down the street. It has great visibility, access and a central location. It's a unique shopping center that's prime for redevelopment.”
Kaplan formed K Corporation in 1992 with a focus on commercial redevelopment opportunities. The Crossing at Meadowood encompasses about 62,000 square feet under roof. The Goodwill location is 31,400 square feet that can be subdivided into smaller increments, although Kaplan hopes to land a retailer interested in taking the entire space — which also can be expanded if the tenant required additional square footage, he notes.
K Corporation already has received interest from a wide range of prospective tenants, including some retailers already in the area who want to upgrade their location. For now, though, the landlord is holding out and weighing various options.
“It is a really busy shopping center, and we are looking for a tenant that will take advantage of the central location and good visibility,” he says. “We've (already) talked to traditional apparel retailers to entertainment to fitness and even some schools and medical spaces. We are just trying to fit that space the best with a tenant that will benefit from its great location.
“We are sort of at a crossroads,” Kaplan adds. “We have been presented with different possible tenants, and we are trying to determine whether we want to go with the possibilities we have now or go out and find a higher-end tenant that's not in the Reno-Sparks market right now. But those take time, and it goes back to the debate of whether we hold out and carry the space while we look for a prime tenant, or do we take what's being presented to us and finish the upgrades to the center.”
Additional redevelopment efforts planned for The Crossing at Meadowood include remodeling the façade of the anchor space once it's leased and the interior is built out, as well as landscaping and general parking lot improvements. K Corporation has already upgraded pylon signage at the center and added signage next to FedEx Office that's visible from both Interstate 580 and Neil Road.
There are several additional notable retail projects in the development pipeline, including one in the coveted Meadowood submarket, that could add nearly 83,000 square feet of new retail space to the regional market.
McKenzie Properties Management, Inc.'s Skypointe Reno project at South McCarran Boulevard and South Virginia Street includes 35,000 square feet of new retail. Meanwhile, S3 Development has begun marketing its Keystone Commons project at Keystone Avenue and West Fifth Street. The project features nearly 48,000 square feet of new retail. The Colliers International retail team of Roxanne Stevenson, Rick Casazza and Adam Wexelblatt are handling leasing inquiries for Keystone Commons.