Northern Nevada is experiencing one of the largest periods of growth that it has had in a long time. The retail market in Reno is benefiting greatly from the growth and heading in a positive direction. The Reno retail market had a strong first quarter in 2019, ending with a current 6% vacancy rate. These low vacancy rates are attracting demand for new construction in the market. With a high demand for retail space, there are several large projects underway that will give the retail market the boost it needs.
Reno is feeling the benefits of heavy in-migration. Population growth is triple the national growth rate; coupled with a median household income that is outpacing the U.S average. The increase in population and income for households point to a strong future for retail in the area. Rent in Reno’s retail sector remains steady, the average asking rent in Reno is $1.48 per square foot monthly. The most notable submarket is South Reno, with an average rent that is approximately 25% above the average for Reno. This area is experiencing an increased demand for retail and housing as it becomes one of the most populated regions of northern Nevada.
There has been a recent resurgence in construction of retail projects, with the most notable project being 60,000 square feet of retail at the Village at Rancharrah. This destination retail project is a part of a larger development that will serve the surrounding household with local, and regional retailers. Additional projects that are underway include, new retail at Park Lane, and a 48,000 square foot development at Double R and Damonte Ranch. These new retail projects are needed to produce goods and services throughout northern Nevada as it continues to grow.
With many of these new retail projects being pre-leased, the vacancy rates are expected to remain steady. With construction costs being higher, we can expect to see an increase in price per square foot. Many companies are investing their businesses in all that Nevada has to offer, and with that comes more jobs and need for commercial real estate space in all sectors. The overall retail market in northern Nevada is in an exciting growth period and will continue as Nevada as a whole experience this time of growth.