Regional office brokers say the Northern Nevada office sector is nearing a semblance of normalcy, although some companies are still navigating the aftereffects of work from home trends.
A dearth of multifamily deals has professional investors adjusting their strategies and pursuing different avenues to deploy investment funds and gain a foothold in the Reno-Sparks market.
The sheer scope of Victory Logistics District, currently under construction in Fernley, is drawing interest from large national tenants that likely would create a “critical mass” once they begin planting their flags in Northern Nevada.
While big box developers can seemingly do no wrong these days in Northern Nevada, new space for smaller light and flex users has been somewhat of a neglected product class throughout this latest extended round of boom development, industrial developers and brokers say.
Regardless of the many ups-and-downs of 2020 and the unknown risk factors brought on by COVID-19, the Reno-Sparks office market wasn’t pummeled as hard as some expected, brokers said.
Reno Public Market — where Sprouts opens in 2 weeks, and CVS just reopened in a new location — 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.
“We had 90% of this center in LOIs (Letters of Intent), and overnight it went to zero," S3 Development founder Blake Smith sayid with a wry laugh when reflecting on how COVID pumped the brakes a year ago on the much-anticipated Keystone Commons development at Fifth Street and Keystone Avenue.
Billions of dollars of institutional investment money, low interest rates and unparalleled demand to deploy capital out of California and into Nevada has created a perfect storm for owners of multifamily apartment complexes across greater Reno-Sparks.
There is currently 4.2 million square feet of industrial space under construction across greater Reno-Sparks, a figure greater than any high-water mark achieved prior to the recession — yet that space isn’t able to drive down vacancy rates because tenants are queuing up to ink deals on those buildings.
“Home prices can’t keep accelerating at these prices. You just have to hope for a soft letdown instead of a crash," says longtime Reno developer Perry Di Loreto. The NNBW recently spoke with Di Loreto and three other regional homebuilders to discuss the challenges they face in meeting the region’s pressing need for residential housing.