RENO, Nev. — No sector of commercial real estate has been battered harder during the COVID-19 pandemic than retail.
From big box brick-and-mortar retailers to smaller, locally owned businesses, it’s been hard times for many retailers since the economic shutdown shuttered businesses in late March.
Yet there still are some bright spots in Northern Nevada’s retail industry. Highlights include:
For many retailers, however, the pain of the pandemic is deeply felt — especially among local restaurant and food retailers.
According to Dickson Commercial Group, a few notable permanent closures in Reno over the past few months include: Fourth Street Bistro; Little Nugget Diner; Rounds Bakery; Pirate’s Pizza; St. James Infirmary; Mindful Cupcakes; Fin & Filet; and Luciano’s Italian Restaurant, among others.
Gary Tremaine, retail broker for DCG, says food users have been hit especially hard due to mandatory shutdowns and reopening restrictions that limit occupancy. While there’s an expected uptick in vacancy as tenants close their doors, landlords aren’t offering sweetheart deals or perks to retain existing tenants or lure in new ones quite yet.
“We are not seeing landlords being too flexible,” Tremaine said. “They were flexible with the deferred rents that came about for two or three months, but right now rents have stayed steady. Landlords have not done anything to reduce rent, but they might be a little more aggressive on tenant improvements.”
Average asking rents stood at $1.22 in the second quarter, up 2 cents from the prior quarter and a rise of 7 percent from a year earlier, DCG reports. However, the landscape could change if cash-strapped tenants are unable to notch some black ink under COVID-19 operating restrictions.
“Everyone is still trying to figure this out,” Tremaine said. “Landlords negotiated terms with tenants thinking this would be a two- or three-month (pandemic), but now some of those negotiations are coming back to the table because nothing has changed.”
Despite the well-documented struggles, developers are pushing forward with new retail projects in the Truckee Meadows and North Valleys.
Mark Keyzers, senior vice president of the investment group with Kidder Matthews, said KP Golden Valley’s recent acquisition of a 10-acre site in North Valleys will add additional retail services to that burgeoning submarket. Keyzers is working with a number of potential tenants that could include food users with drive-through services.
“Those particular categories are emerging from COVID in better shape than traditional sit-down restaurants because people have shifted to getting food take-out,” Keyzers said. “Those retailers have become active again, and those types of (development) sites aren’t easy to come by. COVID changed that out of necessity.”
Also in the works is the first hotel serving the North Valleys. Several smaller hotels have cropped up along Interstate 80 at Vista Boulevard and Robb Drive in recent years, but there’s still no lodging north of the McCarran Loop. Keyzers said the North Valleys is truly an underserved market that provides ample opportunity for many different types of retail.
Across town at the Village at Rancharrah, opening plans for the majority of retailers at the luxury development at Kietzke Lane and Neil Road have been pushed back until this coming spring.
Kyle Rea, chief operating officer with Tolles Development Company, said retail sites at The Village at Rancharrah were completed in July, but the timing wasn’t right for retailers to open their doors.
Tenants such as Perenn Bakery, Base Camp Pizza, Hinoki Sushi, Centro and Grafted Wine Bar are expected to open around April of 2021.
Some retailers at The Village have taken the plunge, however. Art Obsessions opened Oct. 1, and Chez Vous Boutique is slated to open in the next few months or early 2021. Dorinda’s Chocolates and Rolled Mountain Creamery, meanwhile, are scheduled to open in November, and Dolce Vita Spa should open in December, Rea said.
“Dining and local shopping is one of the only outlets left for people to spend their discretionary entertainment dollars,” Rea said. “California is still almost completely shut down, so our salons, spas and service retailers are getting a huge influx from Sacramento and Bay Area patrons who are daytripping or spending the night so they can get their hair and nails done.”
It’s been tough going for many retailers, but some are experiencing strong growth, notes Doug Wiele, founding partner and president of Foothill Partners, the developer behind Reno Public Market at Virginia Street and Plumb Lane.
Foothill Partners is so bullish on Northern Nevada it plans to reposition the old Lowe’s building on Oddie Boulevard as part of a new Oddie District makeover.
The building is currently 209,000 square feet, but it will be divided into smaller units to accommodate a mix of food and beverage retailers, flex-tech office space and artist lofts.
The 40,000-square-foot anchor tenant will be The Generator, the well-known local makerspace that needed a new home after its lease expired at its old Sparks location.
“Within the existing shell of the building we are going to create outdoor spaces, an indoor/outdoor beer garden with a live-performance stage, and 40,000 square feet leased to The Generator,” Wiele said.
Acquisition of the building and adaptive reuse is expected to cost upwards of $30 million, Wiele added. Foothill Partners expects to close on the building in December, with construction beginning in February of 2021.
According to an Oct. 19 press release about the project, Foothill is partnering with
national startup ecosystem developer Innovation Collective — which works with the Nevada Governor’s Office of Economic Development “to launch innovation communities across the state” — on the project.
Representatives for both entities, among other economic leaders, held a press conference Oct. 19 to promote the project’s launch. Go to oddiedistrict.com to learn more.
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