Retailers absorb big-box spaces
The decision a few days ago by Nordstrom Inc. to lease the 31,000-square-foot location once occupied by Borders in Reno adds to the momentum that’s filling vacant big-box space in the region.
It’s probably not the last of big new stores to open in the region, but the factors that brought the recent flurry of big-box announcements may be nearing an end.
Nordstrom plans to open a Nordstrom Rack store in the former Borders location. The off-price retailer is projected for a spring 2015 opening.
It comes as part of a wave of arrival of new retailers that have leased big box space in the region:
Hobby Lobby, which is preparing to open a store in the 50,900-square-foot space at 5685 S. Virginia previously occupied by a JC Penny Home Store.
A home décor firm — generally believed to be Floor & Décor, although the company hasn’t confirmed anything publicly — that is moving into the 55,269-square-foot location once occupied by Safeway at 4823 Kietzke Lane.
Great Western Marketplace, a venue that will host multiple small vendors, planned in the long-vacant 167,000-square-foot former Kmart building in northwest Reno.
Fallas Discount Store and Need 2 Speed, an indoor go-kart facility, which filled the 80,000-square-foot Sierra Center Parkway space left vacant by the 2008 bankruptcy of Mervyn’s.
VF Outlet, which opened a 28,400-square-foot store at Outlets at Legends late last year, filling the space once occupied by Saks Off 5th.
At least two more retailers are looking for big spaces in the Reno-Sparks region, say brokers who specialize in retail properties.
Shawn Smith, a specialist in retail properties with CBRE Inc., says a couple of national trends have helped drive the arrival of big new retailers in northern Nevada.
Wall Street demands ever-increasing growth from retailers, Smith notes, but it’s difficult in the current environment to wring more much more profit out of existing locations. Instead, retailers are adding new stores to capture additional sales.
And while the push for new stores initially focused on major retail markets, retailers began looking at secondary markets such as Reno and Sparks when metropolitan locations became saturated.
When they arrived in Reno, those retailers found attractive offers from hungry property owners, particularly landlords with long-vacant spaces.
“A lot of these guys got really good deals,” says Kelly Bland, a senior vice president and principal with NAI Alliance.
Good deals or not, Smith notes that the big retailers’ search for space generally focused on the Meadowood area, where a majority of them decided to locate.
Solid demographics, improved freeway access, major investments in Meadowood Mall by Simon Property Group and redevelopment of small properties such as the home of Chipotle and Five Guys Burgers and Fries at South McCarran Boulevard and Kietzke Lane all contribute to the strength of the Meadowood market.
Other parts of town, however, still have plenty of big-box space to fill, notes Roxanne Stevenson, a senior vice president with Colliers International.
Among them: Former Sports Authority and Circuit City locations at Sparks Galleria, a vacant Walmart location at North Towne, and the former locations of Target and Lowe’s in Sparks.
Bland says the Reno-Sparks area has about 15 big retail spaces — buildings of 20,000 square feet or more — that are standing vacant.
He estimates that the recent wave of retailers is filling 411,830 square feet of previously vacant space. That’s about 3 percent of the total retail space of 13.8 million square feet in the market. (The figure doesn’t include regional malls.)
But Bland cautions that progress on back-filling vacant big-box space may slow after decisions from the last couple of retailers currently scouting the market.
“Beyond that, it’s going to be interesting if there is a continuation of this,” he says.
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