After dour outlook in 2020, Reno-Sparks retail market primed for big-time bounce-back

An aerial view of construction progress at Reno Public Market, seen March 30.

An aerial view of construction progress at Reno Public Market, seen March 30. Photo: Evan Petty

By Rob Sabo

Thursday, April 29, 2021


Rick Casazza says his dad would be proud — if maybe a bit frustrated.

When Sprouts opens its doors at Reno Public Market in mid-May, it will mark the return of everyday retail and food shopping to the corners of Plumb Lane and Virginia Street for the first time in decades.

It’s a surreal experience for the 63-year-old Casazza, who stood in the Sprouts space earlier this month and reminisced about standing in that very same space as a 5-year-old boy when it used to be Mayfair Market.

Those days are solidly in the rearview, though. Shoppers Square had long been in need of modernization to lure in fresh tenants — and shoppers.

Over the years, the dated two-story mall’s tenant mix had shifted away from daily necessities such as groceries to clothing, small eateries and one of the best Santa photo opportunities ever to grace Northern Nevada.

That changes with the opening of Sprouts on May 12, with much more to come.

The new Sprouts Farmers Market is slated to open May 12. Photo: Rob Sabo

 

"It was really important for us to bring it back to daily needs shopping — a market and a drug(store). That’s what we were when we first opened with Skaggs and Mayfair,” Casazza said.

The renovated Reno Public Market is expected to drive retail traffic back to what’s basically the geographical center of Reno-Sparks. Casazza said it’s just one more piece in the continued gentrification of the Midtown and Wells Avenue retail shopping districts.

“Everything is coming back around,” he said. “It’s becoming relevant again.”

Yet, Casazza said when demolition began, he could imagine the groans from his father, Ralph, a noted architect who designed Shoppers Square and many other iconic Reno landmarks.

The elder Casazza died in 2013.

“When the backhoe was out front ripping the two stories off the mall, I could just hear my dad screaming at me,” Casazza said. “My dad was pretty animated and a perfectionist. But as I was standing inside Sprouts that day, I was thinking of him, my grandparents and my aunts — dad’s two sisters were involved in the original development as well.

“I think they would be really proud right now.”

Additional development to take place at Reno Public Market over the rest of this year includes an expansive food hall with a stage for music and entertainment; 7,000 square feet of space for Makers Paradise, an arts and culture collective currently located in Berkeley, Calif.; and 6,000 square feet of space for Truckee-based FiftyFifty Brewing Company’s new Reno brewpub.

Port of Subs and Coldstone Creamery recently reopened at their new locations on Plumb Lane at Reno Public Market. Photo: Rob Sabo

 

Work crews are currently performing underground infrastructure work, with steel expected to go vertical in the next 60 days, Casazza said.

Coldstone Creamery and Port of Subs have already re-opened in brand-new line space along Plumb Lane, with a third space between those two shops still vacant. CVS also moved and opened in a new location on April 25. It downsized from 30,000 square feet to 15,000 square feet of renovated space that was formerly the home of Sheplers Western Wear.

Reno Public Market is one of the more high-profile retail developments that has seen vertical movement amid the pandemic. Despite the industry being ravaged throughout most of 2020, optimism in the retail sector abounds.

Tad Loran, vice president of retail services with Avison Young, said there’s definitely a sense of hope for many retailers — a sentiment that’s in stark contrast to the bleak outlook they held for much of 2020.

“There were definitely negative indicators throughout 2020 — (retail) was at a standstill,” Loran said. “But in 2021, there’s hope and enthusiasm that the vaccines will get everything back to normal.”

Negative net absorption — space put back on the market from retailers shutting their doors, was around 200,000 square feet, Loran said. Notable closures include long-standing restaurants such as Truckee River Bar & Grill, Little Nugget Diner and 4th Street Bistro.

“Some really long-term businesses couldn’t weather the pandemic, which was unfortunate,” Loran said. “But the ones that made it this far have good operating protocols in place. (Many) got creative through the pandemic and are adding additional outdoor space to expand outdoor seating.

“They may come out of this pandemic and increase their operating income by learning how to deal with the limited capacity restrictions.”

Despite being a difficult year for retail in 2020, The Human Bean opened additional locations in Reno and Sparks. Photo: Avison Young

 

And last year wasn’t all bad news, either. The most notable lease was Cal Ranch, which took 67,769 square feet at Kietzke Plaza on Moana and Kietzke lanes. The site that formerly housed Mervyns had sat vacant for the good part of a decade, if not longer.

Some regional tenants are expanding as well, Loran noted. The Human Bean opened drive-through shops at Kietzke Plaza and the corner of Pyramid and Tyler ways. And the lengthy list of upscale retailers at the Village at Rancharrah is expected to come online as well.

As for the first quarter of 2021, things are looking bright for the greater Reno-Sparks retail market. According to a Q1 retail report from CBRE, the Reno market closed the quarter with a vacancy rate of 5.1%; meanwhile, the region saw nearly 120,000 square feet of positive absorption from January-March, a record high.

The region also posted a record-high average asking lease rate of $1.61 per square foot at the end of Q1, a 9.5% increase from the same quarter a year ago; the Spanish Springs submarket had the biggest increase, jumping $0.26 from $1.73 in 2020 to $1.99 in 2021.

According to CBRE, the largest retail sale of the quarter was at 5150 Mae Ann Ave. — the 94,358-square-foot former Kohl’s building was purchased by Arnold Schlesinger. The second largest sale was the 74,124-square-foot building at 2590 Kietzke Lane for $6.5 million to Paul Blanco Good Car Company.

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