By NAI Alliance
The Reno/Sparks retail market saw continued improvements in the first quarter of 2018. The total gross absorption was 141,799 square feet during the quarter with 31 tenants opening stores. The largest tenant opening was the 40,000 square foot Burlington in the Legends Center.
Net absorption was a healthy 95,159 square feet. The overall retail vacancy rate in the market is 13.1 percent, down from 13.5 percent the previous quarter. The anchor vacancy rate is 13.4 percent and the line shop vacancy rate is 12.7 percent.
There were 46,640 square feet of space vacated during the quarter from 16 tenants. The largest space vacated during the quarter came from the closing of Famous Footwear in the Sparks Crossing in Spanish Springs which was approximately 7,020 square feet.
Retail investment sales continue at a healthy clip in Reno/Sparks with numerous transactions in the first quarter. Two of the more notable transactions include the sale of the Mira Loma Shopping Center, anchored by Scolari’s, at a 7 percent cap rate for $16,350,000 or approximately $160 per square foot. The other sale was the Shops at Bartley Ranch, an unanchored shopping center, for $5.1 million or approximately $148 per square foot.
In the first quarter of 2018, the Las Vegas Valley retail market experienced both expansion and stabilization, as well as closure from a few major retailers. The current vacancy rate is 6.8 percent, 20 basis point higher than last quarter. The average lease rates were $1.48 per square foot, triple net. The lease rate for power centers was $1.55 per square foot, community centers were at $1.30 per square foot, neighborhood centers were at $1.40 per square foot and strip centers were at $1.25 per square foot.
The current average sale price is about $180 per square foot, although that number changes dramatically depending on the submarket. The cap rate is 7.1 percent. In the first quarter, 2.4 million square feet traded, 0.7 million square feet more than Q1, 2017.
There was 157,000 square feet of projects delivered in the first quarter with 400,000 square feet still under construction and 1.9 million square feet planned. Significant projects include Mountains Edge Marketplace, a 130,000 square feet community center, a 500,000 square feet power center being developed along St. Rose with Costco as its anchor retailer and a 165,000 square foot community center anchored by Galaxy Theater in the Southwest. There are a couple new development projects specifically targeting diverse ethnic demographics located in the Chinatown area, west of the 15 Freeway.