Ruffin reflects on 15 years of real estate market
EDITOR’S NOTE: In summer 2002, Tim Ruffin was promoted to managing partner in the Reno commercial real estate office of Colliers International. The announcement was posted in the People section of the very first edition of Northern Nevada Business Weekly. In part with NNBW’s 15th Anniversary celebration, Ruffin sat down with NNBW to share his thoughts on his career and changes to the commercial real estate market since 2002.
Tim Ruffin now has served two decades in the Northern Nevada commercial real estate market and seen the peaks and valleys of the industry.
Back in 2002, Ruffin was just starting to build his career at the Reno office of Colliers International, and was witnessing a robust real estate market.
For example, in a 2002 report conducted by Colliers, big tenants such as Intuit leased 48,000 square feet while Microsoft leased 31,000 square feet at Sierra Corporate Center in south Reno.
The office market has seen its up and downs during the past 15 years. While big tenants were flocking to office properties by 2002, by the middle of the 2000s, it nosedived mainly due to the Great Recession.
“We saw a influx of big office users and they went away,” Ruffin said. “Nearly every office building in South Meadows went into foreclosure. All those big buildings you see on the freeway, nearly all of them went into bankruptcy or sold to distress.”
Tenants such as Centex Homes, Lennar Homes, or University of Phoenix either left the market entirely or drastically downsized operations. In 2002, the vacancy rate was 10.6 percent, but by 2010, it jumped to 22 percent.
Ruffin also noted, back in 2002, construction of new office projects was at “a six-year low,” with only 220,000 square feet of new office space added to the market.
Compare that to 2017, where the only significant project in the last several years was McKenzie Properties’ Mountainview Corporate Center office development located near Kietzke Lane and Neil Road.
“Since 2008 we’ve only had one office building of 30,000 square feet or more,” Ruffin explained. “Office rental rates haven’t risen enough to warrant new construction.”
But its not as if general contractors are being left out in the cold. New industrial and residential projects are more than keeping them busy.
Also, they are being kept busy through renovations of existing office properties to make them more attractive to potential tenants.
With the ebbs and flows of the commercial real estate market, one lesson Ruffin has learned is to invest in quality properties located on high-visible locations.
“If you build a quality product at a great location, you’re OK in the long run. You have your ups and downs but you’ll be OK,” Ruffin said, noting other properties around the Truckee Meadows located away from heavy traffic areas are struggling.
Ruffin noted downtown Reno used to be the financial hub of the region, but by 2002 it shifted to the South McCarran corridor near Meadowood Mall.
“At one point it just wasn’t cool to be downtown but now it is,” he said, noting companies such as Colliers itself have made their home off of Liberty Street in Reno.
Another interesting fact from Colliers report in 2002, the City of Reno had just purchased the office building at One E. First St.
Much like the real estate market itself, the Colliers office has undergone its own metamorphosis. Ruffin is the only remaining original employee of the Reno office. In the mid-2000s, several members of the Colliers staff left to form their own commercial real estate brokerage, NAI Alliance.
But with Ruffin’s guidance, the Colliers office rebuilt its staff, adding several experienced agents as well as some young talent that he has helped nurture in the industry.
“We’ve gone through some organic growth, adding some great local brokers as well as some young professional hires,” Ruffin said. “Our revenues are back to close to where they were around 2005.”
Ruffin started in commercial real estate in 1997, working in the Reno office of CB Richard Ellis (now CBRE), before switching over to Colliers.
He now serves as vice president of the Colliers’ Reno office and still has a deep passion for the commercial real estate market, although he has scaled back a bit the last few years. He now mostly concentrates on larger office transactions.
“I like my clients and my role in the community. I like being mentally engaged although I don’t want to work Saturdays and Sundays like I used to,” he said. “I still like the business like the people that are involved in the industry.”
The cuts would come as a direct result of reduced tax collections caused by business closures across the Silver State due to the COVID-19 pandemic.