Basin Street Properties set for renaissance
Downtown Reno is becoming the hot spot for leading-edge companies seeking office space. And the trend is driving down vacancy rates at a rapid clip.
“In the last five years, we’ve gone from a 22 percent vacancy rate down to 11,” said Par Tolles, president of Basin Street Properties, which owns three Downtown Class-A office buildings as well as other investments in northern Nevada and northern California.
In the past two months alone, five companies either opened new offices or expanded existing offices in Basin Street holdings, grabbing up 28,390 square feet of available space.
“What excites me is that the companies we’re seeing Downtown are different than what we’ve seen in the past,” Tolles said in phone interview.
Banks and law offices are making room for tech-oriented companies such as real estate technology, digital marketing and healthcare.
“Now we’re seeing a lot of diversity. These companies are really interested in being Downtown” instead of heading for the suburbs. They want to “be a part of the renaissance climate.”
Tolles has been involved in Reno commercial real estate investments for 22 years.
“This is the first time we’re seeing Downtown trump the suburbs. Companies want the walkability factor. Younger employees are demanding that.”
Renown Health’s move of its executive offices to Downtown is one of the more significant transactions. At the end of the month, Renown will complete the move into Basin Street’s 50 West Liberty building, taking 16,319 feet on the 11th floor.
“When we considered moving these non-clinical offices, we realized the value of having our senior administrative staff downtown,” Dawn Ahner, executive vice president and chief administrative officer for Renown Health, said in a press release. “It is important for this team to be a part of the downtown revitalization and embedded in the community. This new location achieves that and integrates us with the diverse tenant base of downtown.”
In the same building, Noble Studios will expand its office space before the end of the year to 9,670 square feet. The expansion will accommodate their current needs plus plans for future growth as well.
Earlier this month, Noble Studios, a full-service digital agency specializing in Web, mobile, social media, and web strategy, was named to the Inc. 5000 list of fastest-growing companies in America for the third year in a row, this time at number 2,100.
“What that means is that as our clientele grows, so does our need for space,” Season Lopiccolo, Noble Studios’ chief operations officer, said in a written statement. “We like to foster an atmosphere of creativity and collaboration for our Noblebots (employees), and this space will keep that in place for years to come.”
Lopiccolo agrees that Downtown is a great place to be.
“We’re very excited about the ongoing development here — everything from the growing restaurant scene to the pedestrian- and bike-friendly Riverwalk,” she said. “Also, the views of Reno are amazing from our perch on the eighth floor. Looking out at the city and surrounding mountains reminds us of our northern Nevada roots every day.”
A few blocks away, Clear Capital has expanded its space at 300 E. Second Street from 14,581 to 18,581 square feet as it sees growing demand for its appraisal, analytics and broker products.
“Part of the reason we moved our headquarters to Reno, was to be in a better position to grow and draw on the talented graduates coming out of Nevada,” Brian Opsal, Clear Capital’s vice president of marketing, said in a written statement. “There is a building realization that Reno is an emerging tech hub, with talent migrating out of the Bay Area and graduating from the university. We’re in a good position to capitalize on that.”
Additional expansions in Downtown involve Stifel Nicolaus and TEK Systems.
Basin Street’s Tolles originally came to Reno from the Bay Area, expecting to get experience wearing a variety of hats then moving on after a few years.
“I never left,” he said.
This isn’t the first time it looked like Reno was going to take off as a technology hub, he said.
“I thought back in 2001 that would be the tipping for Reno tech companies. Then it turned off,” Tolles said. “I think what’s happening now is different.”
The influx of skilled manufacturing plants, such as Tesla, breeds related industries, he said. “Good thoughtful minds will eventually leave the Teslas (to create their own companies) and will like it in Reno.
“It hasn’t exploded yet but I think it will. The office ecosystem in Downtown will look very different in two years than what it does today.”
Despite ongoing difficulties, Northern Nevada’s office real estate market will endure, experts predict
IGT’s decision to list its 1.2 million sq. ft. campus for lease this month and the recent $3.8 million sale of Harley Davidson’s 3-story financial services building in Carson City are the latest examples of companies no longer needing larger-scale office properties to maintain productivity levels and meet customer needs.