2011 CommerCial real estate foreCast - Colliers International · 2011 CommerCial real estate foreCast Northern Nevada accelerating success. Year end review and Forecast. colliers

2011 CommerCial real estate foreCast

Northern Nevada

accelerating success.

Year end review and Forecast

colliers Broker teamthe experienced professionals of Colliers will create solutions for all of your real estate needs. With our

professionals, you can be assured of excellent service no matter the type of requirement or location.

Retail Services pg 4

rick Casazzasr. Vice Presidentph [email protected]

roxanne stevensonsr. Vice Presidentph [email protected]

adam Wexelblattretail sales associateph [email protected]

Industrial Services pg 8

michael J. mcCabesr. Vice Presidentph [email protected]

Barry Brownsr. Vice Presidentph [email protected]

Office Services pg 12

tim ruffin, sior, CCimsr. Vice President managing Partnerph [email protected]

melissa molyneauxsr. associateph [email protected]

Land Services pg 16

scott t. Barnes P.e.associateph [email protected]

Property Management

robert la Chancesr. Property managerph [email protected]

mathias HughesProperty managerph [email protected]

Jerri Geeradministrative assistantph [email protected]

Support Staff

Katina Parcosr. administrative assistantph [email protected]

lucie HaleGraphic assistantph [email protected]

p. 2 | Colliers international - reno

colliers operations team

Retail Services pg 4

rick Casazzasr. Vice Presidentph [email protected]

roxanne stevensonsr. Vice Presidentph [email protected]

adam Wexelblattretail sales associateph [email protected]

Industrial Services pg 8

michael J. mcCabesr. Vice Presidentph [email protected]

Barry Brownsr. Vice Presidentph [email protected]

Office Services pg 12

tim ruffin, sior, CCimsr. Vice President managing Partnerph [email protected]

melissa molyneauxsr. associateph [email protected]

Land Services pg 16

scott t. Barnes P.e.associateph [email protected]

Property Management

robert la Chancesr. Property managerph [email protected]

mathias HughesProperty managerph [email protected]

Jerri Geeradministrative assistantph [email protected]

Support Staff

Katina Parcosr. administrative assistantph [email protected]

lucie HaleGraphic assistantph [email protected]

the right Place for Northern Nevada Commercial real estate services

Colliers international – reno is one of the most successful, and innovative commercial brokerage firms in Northern Nevada, setting the standard for providing exceptional services in commercial real estate sales, leasing, and management. through teamwork, dedication, and effective and efficient client support, the company is deeply committed to excellence and progress in every endeavor it undertakes. members in the firm have an in-depth understanding of the issues impacting the on-going evolu-tion of commercial development in Northern Nevada, and share that expertise with every client on every transaction.

the Colliers international – reno office began operations in 1999 and is staffed with the most experienced, respected brokers in the area. specializing in all aspects of commercial real estate, the firm has assembled a team of highly-talented and experienced professionals in industrial, retail, office, investments, and land.

the combination of the reno office’s experienced brokers and staff presents a multi-disciplined team approach that allows the firm to successfully complete many of the largest and most complex real estate transactions in the reno/sparks market. this approach allows Colliers international to provide clients with a broad range of expertise including market research, financial analysis, building systems and design evaluation, operational and cost analysis, land planning and documentation review.

in addition, Colliers international has an in-depth understanding of the issues impacting the reno/sparks development process. it has become increasingly important to understand and implement effective construction management and real estate devel-opment procedures in today’s competitive and complex real estate markets. Colliers international is committed to aiding and guiding its clients through the maze of procedures and criteria often required by lenders, public entities, contractors, architects, engineers, material suppliers, advisors, and other services. We assist in the analysis of real estate transactions by performing preliminary and full service feasibility studies, site analysis, zoning/mapping evaluation, architectural/engineer selection, and contractor/subcontractor bidding and selection procedures.

regional summarY

Greater reno-tahoe, once known primarily for its gaming history, has transitioned into a more diverse economy in recent years. emerging industries include clean energy technology and software, which are helping to attract a younger and more educated population, as well as entrepreneurial companies.

Pro-BusiNess tax Climate > No state Corporate income tax > No Personal income tax > No franchise tax > No unitary tax > No estate or Gift tax > No inheritance tax > No inventory tax

Quality of life > 300 days of sunshine per year > average temperature of the region: 67.4 degrees (high) and 33.2 degrees (low) > air quality index: 81.9 percent > average commute time: 15.6 minutes > 6 percent of population walk or bike to work > largest concentration of ski resorts in North america are all within a fifty-mile radius

maJor traNsPortatioN HuB > reno-tahoe international airport


Los Angeles

San Diego

San Francisco Salt Lake City

Phoenix

Denver

Portland

Seattle

Helena

Cheyenne

Albuquerque

Boise

Reno/ Sparks

Sacramento

Colliers international - reno | p. 3

2010 Year end review and 2011 forecast |

13.0%

13.5%

14.0%

14.5%

15.0%

15.5%

16.0%

16.5%

17.0%

17.5%

Q1 - 2009 Q2 - 2009 Q3 - 2009 Q4 - 2009 Q1 - 2010 Q2 - 2010 Q3 - 2010 Q4 - 2010

$1.00

$1.10

$1.20

$1.30

$1.40

$1.50

$1.60

$1.70

$1.80

$1.90

Vacancy Rent

www.colliers.com/reno

retail market review the Year of stabilizationWe have gone from 2010 where “not as bad was the new good” to a year showing signs of stabilization. after three tough years, we are happy to say goodbye to the Great recession. there is no question that we are far from being out of the woods because job recovery and improvement to the residential market are critical for the revival of retail. However, recent signs of new retail activity are encouraging.

the good news is that we believe retail commercial real estate has hit bottom. Vacancy rates fell slightly from 16.6 percent in 2009 to 15.8 percent to close 2010. the market also posted year-to-date positive net absorption and while asking rents did decrease to an average monthly asking rate of $1.46 per square foot, we believe that they are finally leveling out. in addition, triple net costs remained consistent, and in some cases, were even reduced.

2010 holiDaY sales stronGiCsC reported a 4.0 percent increase over the previous year, the largest increase in four years. in addition, e-commerce was up 12.0 percent, an all time high. the season will also be remembered for an exceptional Cyber monday after Christmas, which was the first billion-dollar spending day in history.

top performers for the year included abercrombie & fitch, tJ maxx, Dollar tree, Walgreen’s, amazon.com and department stores to name a few. the luxury-goods market also started to rebound as higher income shoppers got fed up with skimping. among discounters, target emerged as the favorite over Wal-mart as consumers wanted value and quality. in electronics, anything with an apple logo sold furiously while flat screen televisions and computer sales cooled.

market inDiCators

Q4-10projected

Q1-11

VaCanCY

absorption

ConstruCtion

lease rates

researCH & foreCast rePortreno | neVaDa

Year end review | retail

rents and vacancies are beginning to stabilize

historiCal VaCanCY anD askinG rates


2010 Year end review and 2011 forecast | Retail

after four years of decline, Washoe County taxable sales posted modest increases in 2010 compared to the previous year. annual taxable retail sales per capita peaked in 2006 and have decreased every year since.

still a tenant’s marketas there is no shortage of available space for retailers, it remains a tenant’s market and they are not shy about pitting one landlord against another. even in centers where landlords avoided a flood of vacancies, they probably are collecting fewer rent dollars as lessees pressed for concessions and leases rolled over to lower market rates. rent reductions have abated, but landlords will most likely continue struggling to regain pricing power and will compete intensely to attract top performing tenants.

retailers with cash in their coffer are taking advantage of increased sales and favorable economics. several tenants have announced plans to step up expansion. Value, discount, dollar, automotive, cell phones and casual dining restaurants lead the pack.

although we lost a few restaurants last year, franchise quick serve and casual concepts are driving restaurant expansion. While independent

restaurants have been hit the hardest the past two years, there are several local and regional chains vying to squeeze in among the national contenders and take advantage of the market conditions.

2010 ClosinGs - Who Will be neXt?safeway and savemart’s closures were very impactful as was sax off fifth and the Jones New york concepts in the legends. restaurants such as Chili’s, austin’s, Bully’s and the melting Pot are also noteworthy.

even with the recent credit line from Ge, Borders Books filed Chapter 11 and 30 percent of their underperforming stores will close. thankfully, reno is not on the first round of closures. office Depot is running third in a three-horse race and many industry experts do not believe they will survive 2011. as for Blockbuster, the writing is on the wall with a possible Chapter 11 liquidation looming. JC Penney’s announcement that they are phasing out of the catalog business will result in the closing of all outlet stores. other than those mentioned above, we do not see other chains closing down, just more pruning and consolidations.

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14131211

1

3 4

7 10

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80

80

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68

9

siGnifiCant retail aCtiVitY

tenant loCation CountY sizeKoHl’s eagle station Carson City 86,000 sf

Big lots southgate Carson City 34,973 sf

total Wine & more the Commons Washoe 28,000 sf

ross silver state Plaza Washoe 27,000 sf

tJ maxx oulets at legends Washoe 24,837 sf

Planet fitness silver state Plaza Washoe 19,000 sf

Big five sporting Goods southgate Carson City 14,000 sf

Pier 1 Del monte Plaza Washoe 10,550 sf

Charming Charlie summit sierra Washoe 9,754 sf

Dollar tree three flags Washoe 8,000 sf

autoZone Canyon Center Washoe 7,000 sf

famous Dave’s Kietzke & mcCarran Washoe 6,656 sf

einstein Bros. Bagels meadows marketplace Washoe 4,400 sf

olive Garden southgate Carson City Ground lease

fresh & easy eagle landing Washoe Pad sale

Wal-mart super Center minden/Gardnervlle Douglas sale

suBmarKet maP Key

1 south reno2 meadowood3 southwest reno4 Parklane5 airport6 south Virginia7 Kietzke8 reno redevelopment9 sparks redevelopment10 sparks industrial11 Northwest reno12 Northeast reno13 West sparks14 Northeast sparks15 North Valleys16 spanish springs


2010 Year end review and 2011 forecast | 2010 Year end review and 2011 forecast | Retail

siGnifiCant transaCtionsthere were several important transactions done last year including several new to the market such as einstein Bros. Bagels, total Wine & more, Charming Charlie, Pier 1, famous Dave’s, fat Burger and Planet fitness. in Douglas County, Kohl’s opened in eagle station and deals were completed with olive Garden, Big 5 and Big lots in southgate.

a concept that does not yet exist in Northern Nevada and worth highlighting is total Wine & more. they are a wine and spirit superstore and carry over 8,000 different wines, 2,000 types of spirits and 1,000 beers. their emphasis is on fine wines from every wine-producing region in the world with the lowest possible prices. they will open in april in the former linens-n-things space.

traDitional supermarket sQueezeDthe biggest story here is that Wal-mart is looking at landing four or five 42,000 square foot Neighborhood market concepts here. these stores will have a drive-thru pharmacy and positioned to “fill in the holes” not already served by one of their super centers.

the grocery industry is changing as is the way consumers shop for food. retailers better known for selling clothes or prescriptions, such as target, Walgreen’s and CVs, are expanding into the grocery business in a big way. sun flower market, sprouts and Hispanic grocers are looking for locations and dollar stores are enlarging their grocery sections. another sign of change is that

raley’s is preparing to convert their store in old town mall to its discount food source brand. add Costco and other warehouse clubs into the mix and it is easy to see how the traditional supermarket is being pinched. Weak regional chains could one day be at risk.

Wal-mart DriVes neW ConstruCtionthe pullback in construction will help recovery as existing space is absorbed. Wal-mart is driving most of the new construction with the recent completion of their Glendale store and the new project under way in North Valley. While many of the proposed projects have been cancelled, we believe that Park lane Promenade is one that will be built as soon as they secure an anchor tenant. additionally, Keystone Commons, previously Keystone Corners, is slated for redevelopment and expansion.

trenDs to WatChthe retail store is no longer the center of the retail world. Consumers now have access to anything they want 24/7 so we expect to see more e-commerce, social networking and smart phones being used as retailers connect to shoppers wherever they are and whatever their demographic.

look for more “stores within stores”. examples include radioshack-run mobile phone shops inside target. they expect to have over 1,400 kiosks by the end of June. sears is carving out space for the trendy retailer forever 21 and even Wal-mart has 400 in-store leases ready for well-matched retailers.

eXpanDinG retailers & restaurants

eXpanDinG retailers eXpanDinG restaurants

Big lots (Carson City) einstein Bros Bagels

Walmart super Centers fatburger

Dollar tree Genghis Grill

o’reilly Peg’s Glorified Ham & eggs

Discount tires squeeze inn

Verizon subway

ross olive Garden (Carson City)

Walmart Neighborhood Grocery famous Dave’s

tJ maxx u-swirl

autozone mmmm yogurt

tires Plus yogurt Beach

t-mobile Great Basin Brewery

inDustrY trenDs

Get on Board with social •networking

on-line retailing Grows•

stores “within stores”•

Pop Ups Popular•

smaller Big Boxes•

High income consumers spend •More freely

flight to value and Quality Here •to stay

store openings increases/•closings to decrease

Greening of retail•


2010 Year end review and 2011 forecast | Retail

shoppers are expected to start opening their wallets as there is pent up demand and improved consumer confidence; however, unlike the “bubble” years, they will spend smartly and strategically and out of current income rather than with plastic. it is also pretty safe to say that many stores will be smaller and their operators more responsive.

retail inVestment outlookthe availability of capital, along with low interest rates, has accelerated the pace of retail investments in key markets. the ability to borrow money at approximately five percent has made it possible to accept CaP rates in the six to seven percent range. While most investors have decided to play it safe and purchase a+ grocery anchored and triple net leased properties over the past year, with the low interest rates we do foresee investors looking to class B and some class C assets. locally, there were only two shopping centers sold over the last year—eagle station in Carson City and Double r Galleria. Going forward in our market, we see retail investments being driven by distressed assets with most being lower-quality assets.

2011 foreCastClearly, the road ahead will be bumpy at times. optimism about the future will continue to ebb and flow, especially until more people are working. shoppers will expect rock bottom prices on toothpaste and paper towels while at the same time, the latest apple gadget will fly out the door at full price. the Colliers’ retail team is cautiously optimistic about the remainder of 2011 and predicts that net absorption will remain even; new construction will be flat except for Wal-mart; vacancy rates should post a modest decline; and lease rates will remain firm. We believe that the retail industry is poised for a gradual recovery that will materialize slowly in 2011 and more aggressively in 2012.

this report and other research materials may be found on our website at www.colliers.com. this quarterly report is a research document of Colliers international – las Vegas, NV. Questions related to information herein should be directed to the research Department at 702-836-3781. information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof.


tim ruffinmanaging [email protected] tel +1 775 823 9666

researCher:

John staterresearch [email protected] +1 702 836 3781

ContributinG author:

roxanne stevensonsenior Vice presidentretail [email protected] +1 775 823 9666


480 offices in61 countries on6 continentsunited states: 135Canada: 39latin america: 17asia Pacific: 194emea: 95

> $1.9 billion in annual revenue> 2.4 billion square feet under management> over 15,000 professionals

uniteD states:

Colliers international - reno10765 Double r blvd.suite 100reno, nevada, 89521

tel +1 775 823 9666faX +1 775 823 4699

retail at GlanCe

total inventory 15,468,546 sf

overall Vacancy(%) 15.8%

monthly average asking rents $1.46

monthly NNN $0.38

Net absorption 247,382 sf

New Construction Completed in 2010 200,000 sf

under Construction 162,200 sf

large land Parcels NoNe solD

asking Pad Prices $8-$18 / sf

*Excludes regional malls and centers under 10,000 SF.

northern neVaDa shoppinG Centers 2010 sales

Center purChase priCe Gla priCe per sf sale Date

eagle station(Carson City)

$9,000,000 114,258 sf $78.00 5/10/2010

Double r Galleria $2,750,000 37,308 sf $74.00 12/16/2010


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

Vacancy Asking Rent


industrial market review With the fourth quarter of 2010 wrapped up, it’s only appropriate that we look back over the year. from an industrial market perspective, the Western Nevada industrial market experienced a consistent and slight decrease in vacancy in each and every quarter, a small amount of positive net absorption for the year, with a reasonable amount of leasing activity and some sales transactions. in comparison to 2009, we believe the market has reached a relative floor from which it can gradually gain strength.

there was a steady decline in the vacancy rate and we are hopeful this trend continues through 2011. it was great to see the vacancy rate drop below 15.0 percent in the fourth quarter, to close the year at 14.9 percent.

from a net absorption perspective, it was very promising that the year ended with positive demand. While year-to-date 2010 posted 282,000 square feet of positive net absorption, the fourth quarter was responsible for the vast majority, 247,413 square feet.

this is most refreshing relative to the negative net absorption in 2009. the increase in net absorption was due in part to a smaller number of large industrial closures, a reasonable amount of growth shown by existing industrial tenants to the reno market, and some new industrial tenants.

With no significant business closures announced in the fourth quarter, we are confident that the worst is now behind us.

We saw a number of major lease transactions in the fourth quarter and for the most part, 2010 saw many new and expanding tenants. the significant lease activity table on page 2, lists many of the 2010 lease transactions, greater than 50,000 square feet. Colliers industrial services is fortunate to have been involved in several of these transactions.

market inDiCators

Q4-10projected

Q1-11

VaCanCY

net absorption

ConstruCtion

rental rate


Year end review | indUstrial

historiCal VaCanCY anD askinG rates



industrial lease rates seem to have settled in all product categories, we saw a stiffening of ask and lease rates in the fourth quarter, albeit significantly down from the peak years of 2006 and 2007, we feel that a new floor has been set for market lease rates.

it should be noted, that at the end of the fourth quarter of 2010, there was just over 11 million square feet vacant in all industrial property types, including r&D/flex, mid-range, and warehouse/distribution properties. this will maintain downward pressure on any lease rate increases in 2011, but we expect a slight improvement in vacancy as the new year progresses.

While just 2-3 years we had over 3 million square feet of newly constructed buildings in the 400,000-600,000 square foot range, this market segment has seen some significant lease transactions, reducing the amount of this big-box

space available.

Currently the largest class a warehouse/distribution space available is the West america Commerce Center at 632,000 square feet located in the tahoe reno industrial Center. there was an increased interest in larger spaces in the fourth quarter; and as we start 2011, there are three large user requirements considering the market: two national retailers and a large third -party logistics firm are all in Western Nevada looking for big-box space.

Given the current market conditions, there was no speculative construction over the entire year. New building was limited to just a couple of build-to-suit projects, one of those, a 90,000 square foot project for schluter flooring systems, where construction commenced during the fourth quarter in the tahoe reno industrial Center.

size tenant loCation tYpe

566,875 sf Diapers .com triC New lease

390,000 sf ryder logistics stead New lease

225,000 sf sts triC New lease

203,000 sf Honeywell fernley New lease

134,000 sf freightliner stead renewal

133,000 sf undisclosed stead New lease

100,000 sf Benco triC New lease



61,400 sf JlH logistics sparks New lease

56,000 sf technipak reno New lease

52,500 sf inotrac reno New lease

52,500 sf swanson Health spanish springs New lease

50,900 sf Velux spanish springs New lease

50,000 sf mZB spanish springs New lease

8080

395

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SUBMARKET MAP KEY

ID SUBMARKET

1 South Meadows

2

3 Southwest Reno

4 Downtown

5 Airport

6 West Reno

7 Sparks

8 Northwest Reno

South Meadows

Meadowood

Southwest Reno

Airport

Sparks

NorthwestReno

West Reno Downtown

siGnifiCant lease aCtiVitY YtD - 50,000 sf aboVe

-1,000,000

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10

Net Absorption

net absorption (sQuare feet)

industRial


2010 Year end review and 2011 forecast | 2010 Year end review and 2011 forecast |

market Comparisons

offiCe market

tYpe Bldgstotal

inventorYsF

directvacant sF

directvacancY

rate

suBlease vacant sF

suBlease vacancY

rate

totalvacant

sF

vacancYrate

current Quarter

vacancY rateprior

Quarter

vacancYcurrentoccupied

sF

net aBsorption current Qtr

sF

net aBsorption

YtdsF

completionscurrentQtr sF

under construction

sF

weightedavg asking

rentalrate

airPort suBmarKet

industrial 205 7,461,413 716,134 9.60% 55,100 0.74% 771,234 10.3% 8.5% 6,826,027 (135,848) (262,862) - - $0.69 r&d/FleX 2 69,685 - 0.00% - 0.00% - 0.0% 0.0% 69,685 - 3,501 - - $- whs/dist 38 2,574,008 558,006 21.68% - 0.00% 558,006 21.7% 20.2% 2,053,750 (37,748) (92,458) - - $0.25 total 245 10,105,106 1,274,140 12.61% 55,100 0.55% 1,329,240 13.2% 11.4% 8,949,462 (173,596) (351,819) - - $0.51

DoWNtoWN suBmarKet

industrial 61 1,349,775 318,157 23.57% - 0.00% 318,157 23.6% 23.6% 1,031,618 - (18,552) - $0.43 whs/dist 11 507,467 84,702 16.69% - 0.00% 84,702 16.7% 16.7% 422,765 - (2,020) - - $0.40 total 72 1,857,242 402,859 21.69% - 0.00% 402,859 21.7% 21.7% 1,454,383 - (20,572) - - $0.42

mCCarraN suBmarKet

industrial 25 2,112,480 647,252 30.64% 45,000 2.13% 692,252 32.8% 32.8% 1,420,228 - (86,760) - - $0.38 whs/dist 9 4,447,119 1,275,405 28.68% 100,000 2.25% 1,375,405 30.9% 33.2% 2,971,714 100,000 566,875 - - $0.33 total 34 6,559,599 1,922,657 29.31% 145,000 2.21% 2,067,657 31.5% 33.0% 4,391,942 100,000 480,115 - - $0.35

meaDoWooD suBmarKet

industrial 36 1,447,547 70,180 4.85% 10,780 0.74% 80,960 5.6% 6.1% 1,358,587 8,000 (19,982) - - $0.79 r&d/FleX 4 65,680 9,220 14.04% 16,870 25.69% 26,090 39.7% 39.7% 39,590 - (1,400) - - $0.92 whs/dist 14 1,854,516 80,698 4.35% 39,502 2.13% 120,200 6.5% 6.5% 1,734,316 - 74 - - $0.47 total 54 3,367,743 160,098 4.75% 67,152 1.99% 227,250 6.7% 7.0% 3,132,493 8,000 (21,308) - - $0.64

NortHWest suBmarKet

industrial 55 2,666,569 93,175 3.49% - 0.00% 93,175 3.5% 4.0% 2,558,749 14,645 53,865 - - $0.59 whs/dist 19 2,258,100 224,675 9.95% 24,000 1.06% 248,675 11.0% 7.6% 2,086,222 (76,797) (56,140) - - $0.29 total 74 4,924,669 317,850 6.45% 24,000 0.49% 341,850 6.9% 5.7% 4,644,971 (62,152) (2,275) - - $0.37

soutH reNo CorriDor suBmarKet

industrial 36 2,780,245 204,128 7.34% - 0.00% 204,128 7.3% 7.5% 2,571,317 4,800 13,244 - - $0.60 whs/dist 14 2,355,485 188,040 7.98% 285,187 12.11% 473,227 20.1% 25.4% 1,756,058 126,200 (350,015) - - $0.34 total 50 5,135,730 392,168 7.64% 285,187 5.55% 677,355 13.2% 15.7% 4,327,375 131,000 (336,771) - - $0.42

soutHWest suBmarKet

industrial 11 273,414 28,472 10.41% - 0.00% 28,472 10.4% 10.4% 244,942 - - - - $0.38 r&d/FleX 1 33,307 4,977 14.94% - 0.00% 4,977 14.9% 21.6% 26,125 2,205 835 - - $0.82 whs/dist 2 44,258 7,320 16.54% - 0.00% 7,320 16.5% 16.5% 36,938 - 22,810 - - $0.93 total 14 350,979 40,769 11.62% - 0.00% 40,769 11.6% 12.2% 308,005 2,205 23,645 - - $0.53

sParKs suBmarKet

industrial 368 12,985,936 1,124,540 8.66% 138,599 1.07% 1,263,139 9.7% 10.4% 11,639,195 83,602 (35,636) - - $0.52 r&d/FleX 4 100,214 - 0.00% 7,500 0.00% 7,500 7.5% 7.5% 92,714 - - - - $0.45 whs/dist 137 16,225,391 2,774,595 17.10% 448,949 2.77% 3,223,544 19.9% 20.7% 12,868,006 133,841 81,658 - - $0.27 total 509 29,311,541 3,899,135 13.30% 595,048 2.03% 4,494,183 15.3% 16.1% 24,599,915 217,443 46,022 - - $0.34

steaD suBmarKet

industrial 34 3,191,676 239,450 7.50% - 0.00% 239,450 7.5% 6.1% 2,998,226 (46,000) 25,132 - - $0.38 whs/dist 28 6,939,748 712,122 10.26% 243,870 3.51% 955,992 13.8% 13.4% 6,011,256 (27,500) 346,460 - - $0.26 total 62 10,131,424 951,572 9.39% 243,870 2.41% 1,195,442 11.8% 11.1% 9,009,482 (73,500) 371,592 - - $0.28

West reNo suBmarKet

industrial 74 1,757,827 143,328 8.15% - 0.00% 143,328 8.2% 8.2% 1,614,499 - (23,294) - - $0.52 whs/dist 4 230,430 38,940 16.90% - 0.00% 38,940 16.9% 20.5% 183,090 8,400 - - - $0.45 total 78 1,988,257 182,268 9.17% - 0.00% 182,268 9.2% 9.6% 1,797,589 8,400 (23,294) - - $0.51

marKet total

industrial 905 36,026,882 3,584,816 9.95% 249,479 0.69% 3,834,295 10.6% 10.4% 32,263,388 (70,801) (354,845) - - $0.52 r&d/ FleX 11 268,886 14,197 5.28% 24,370 9.06% 38,567 14.3% 15.2% 228,114 2,205 2,936 - - $0.82 whs/dist 276 37,436,522 5,944,503 15.88% 1,141,508 3.05% 7,086,011 18.9% 19.5% 30,124,115 226,396 517,244 - - $0.29 total 1,192 73,732,290 9,543,516 12.94% 1,415,357 1.92% 10,958,873 14.9% 15.1% 62,615,617 157,800 165,335 - - $0.37

QuarterlY Comparison anD totals

Q4-10 1,192 73,732,290 9,543,516 12.94% 1,415,357 1.92% 10,958,873 14.9% 15.1% 62,615,617 157,800 165,335 - - $0.37

Q3-10 1,191 73,598,555 9,699,746 13.18% 1,417,343 1.93% 11,117,089 15.1% 15.3% 62,464,078 151,123 141,270 - - $0.37

Q2-10 1,191 73,598,555 9,989,982 13.57% 1,278,230 1.74% 11,268,212 15.3% 15.5% 62,283,567 180,511 (9,853) - - $0.37

Q1-10 1,191 73,598,555 10,004,956 13.60% 1,443,767 1.96% 11,448,723 15.6% 15.3% 62,473,931 (190,364) (190,364) - - $0.38 Q4-09 1,191 73,598,555 10,258,088 13.95% 1,000,271 1.36% 11,258,359 15.3% 15.0% 62,340,196 (197,889) (1,743,277) - - $0.33 Q3-09 1,188 73,598,555 9,909,090 13.52% 1,151,380 1.57% 11,060,470 15.0% 15.2% 62,538,085 111,795 (1,545,388) - - $0.33 Q2-09 1,184 73,598,555 9,919,787 13.55% 1,252,478 1.70% 11,172,265 15.2% 14.0% 62,426,290 (858,372) (1,657,183) - - $0.33 Q1-09 1,151 73,598,555 8,766,966 12.30% 1,546,927 2.20% 10,313,893 14.0% 12.9% 63,284,662 (798,811) (798,811) 32,000 - $0.33 Q4-08 1,149 73,566,555 8,223,293 11.50% 1,259,789 1.80% 9,483,082 12.9% 10.9% 64,083,473 (930,523) (552,760) 565,550 - $0.33

industRial





in this environment, new construction costs are at historically low levels, and this lack of construction volume has definitely hurt the local economy and compounded our unemployment rate for the Western Nevada region. But from a market perspective, this has a positive side, as it allows time for our existing inventory to be leased or sold. When lease rates and sale values recover, developers can once again consider speculative construction.

there were no major industrial land sales in the fourth quarter, but asking prices for industrial land have seen reductions in the 40-50 percent range by motivated sellers. industrial zoned land is now readily available for purchase in the stead North Valleys area listed for $2.00-$3.00 per square foot, in the south meadows and airport submarkets are in the $6.00-$8.00 per square foot range. land in the tahoe reno industrial Center remains in abundant supply and is being offered with aggressive pricing from both the park developer and other private sellers.

the reno/sparks industrial market still enjoys a fundamental advantage as a regional distribution point, and reno remains a good fit as companies evaluate their supply-chain strategy. as the economy and specifically consumer spending begin to rebound, we’ll see more new companies come into the market. this process began in 2010, especially in the fourth quarter, and activity continues to be brisk as we start 2011.

the fourth quarter and really the entire year, represented a time of resetting expectations for industrial property owners. the most agile and successful have adjusted to this new market and have focused on surviving the current market conditions until things improve. the majority of lease and sale transactions occurring today have one common characteristic; they usually have a very happy tenant or buyer involved.

yes, it is a tenant’s market. those with strong credit, can get into a new lease for space that is larger in size, lower in cost, more functional, and more strategic in location. ultimately, relocating and expanding tenants are trading-up for less money.

there have been limited investment transactions. We have seen equity infusion transactions into industrial real estate to help landlords bridge the gap to a better market. examples are the Blackstone investment of last october in Prologis, the recent Calstrs JV with Panattoni Development and now as we start 2011, the merger of amB and Prologis. Prudent landlords are doing everything possible in this market to make sure they have sufficient capital, become more efficient, and most importantly, are more responsive to existing and new tenants.

With an increase of available , vacant, mid-sized buildings for sale, one emerging opportunity remains with businesses seeking to purchase facilities for their own use. in the fourth quarter of last year, we certainly saw an up-tick in activity for these mid-range market purchases, for owner/user buyers.

in the fourth quarter of 2010, we saw signs of stabilization in the industrial market and we look forward to 2011 continuing to show increased positive net absorption, reduced vacancy, and perhaps a slight increase in rents and sales values. unfortunately, we don’t see much construction with a few specialized build-to-suits for unique users and perhaps a very significant build-to-suit project for a national retailer now investigating the market. let’s keep our fingers crossed because our construction industry needs this important boost.


researCher:



michael J. mcCabesr. Vice presidentindustrial [email protected] +1 775 823 9666




uniteD states:


tel +1 775 823 9666faX +1 775 823 4699

industRial


0%

4%

8%

12%

16%

20%

24%

4Q2008

1Q2009

2Q2009

3Q2009

4Q2009

1Q2010

2Q2010

3Q2010

4Q2010

$1.40

$1.50

$1.60

$1.70

Vacancy Rate Average Asking Rent


office market review siGns of lifeHopefully, we can say the Northern Nevada office market hit bottom in 2010 and will only improve going forward. the good news is that the year-end 2010 statistics are indicative of this. at this time last year, we said that one year from today we’ll feel much better, and we were right. 2011 has started off with a renewed sense of optimism or, at least, more optimistic than in previous years.

2010 was forecasted to be the year of flat and we even used the phrase, ‘flat is the new up’. We are happy to report that most of the statistics that we track were actually up in 2010. from a leasing perspective, all statistics in buildings over 10,000 square feet ended the year in positive territory when compared to 2009. for the first time since 2006, the Northern Nevada office market registered positive net absorption. year-end net absorption was 80,014 square feet. this was due primarily to the construction of two build-to-suit projects for the federal Government and Wms Gaming. the office vacancy rate ended the year at 20.4 percent, down from 21.0 percent at the end of 2009.

in the sales arena, 2010 had a handful of owner-user sales under 10,000 square feet , while there were only two office investment sales. most of the sales were bank-owned garden office buildings. in addition, most of the buildings, regardless of type of sale, were sold to cash buyers. the federal Government played a large role in leasing, signing new leases for Cis, iCe, and the fBi in 2010. We do not expect to see this trend continue with any enthusiasm in 2011 since the federal Government has scaled back its funding. there could be a few Gsa deals but we do not anticipate the volume seen in 2010. other industry sectors that either leased space or expanded in 2010 were for-profit education and green energy companies.

market inDiCators

Q4-10projected

Q1-11

VaCanCY

net absorption

ConstruCtion

rental rate


Year end review | office

historiCal VaCanCY anD askinG rateslease rates have stopped their precipitous fall and have leveled out. We expect a slow rise going forward.



the trend of ‘flight to quality’ continued in 2010, as tenants already in our market relocated to save on operating costs or to upgrade their space. We see this trend continuing into 2011 and beyond. one example of this ‘flight to quality’ is the Village at lakeridge, a class a office building that was 30 percent vacant at the beginning of 2010 and is now 100 percent occupied. these relocations by local tenants are having a negative impact on the B and C class properties, as tenants vacate those properties for space in newer buildings in better areas of town for relatively the same lease rate. We’ve already seen signs of this, as the vacancy for class a properties is now 17.8 percent (down over 300 basis points), while B properties have a vacancy rate of 23.9 percent and C properties 21.7 percent which is an increase from prior years. We are starting to see large tenants that are new to the Northern Nevada office market looking for office space. We anticipate a handful of deals in the 10,000 square foot range will get signed in the first two quarters of this year. most of the activity in vacant properties has been in the south reno Corridor or the meadowood mall. Both of those submarkets have low asking lease rates and comparatively low vacancy rates; the south reno

Corridor‘s year-end vacancy rate was 17.5 percent, down from 27.0 percent at the end of 2009, and meadowood had a year-end vacancy rate of 15.0 percent, down from 16.2 percent at the end of 2009.

New construction was at a minimum in 2010, with only two buildings being completed. We previously mentioned a 20,000 square foot build-to-suit for the federal Government (the united states Citizenship and immigration services) and a 53,000 square foot build-to-suit for Wms Gaming. Both buildings were constructed in south meadows. We do not expect to see any speculative construction in 2011 and if there is any new construction, it will be build-to-suit.

We hope the Northern Nevada office market continues its road to recovery, but we will know it will be a bumpy one. a significant amount of shadow space will enter the market as existing lease terms end and those tenants renew or relocate their lease for less space. the leases that were written at the height of the market in 2007-2008 will affect our market through 2012-2013. the most probable concern for the future of office space is the shrinking requirement of work space for employees. over the past three

lease aCtiVitY

siGnifiCant lease aCtiVitY

propertY aDDress tenant size tYpe

9805 Double r Blvd. PC Doctor 13,797 sf renewal

9790 Gateway Gaming Control Board 12,000 sf New lease

5470 Kietzke lane Western title 10,208 sf New lease

9460 Double r Blvd. ram Power 8,662 sf New lease

50 W liberty Nai alliance 6,000 sf New lease

5525 Kietzke lane oracle 6,000 sf New lease

80

395

395

80

NORTHVALLEY

WEST RENO

SPARKS

SOUTHRENO

MEADOWOOD

AIRPORTCENTRAL

DOWNTOWNPy

ram

idH

ighw

ay

SUBMARKET MAP KEY

ID SUBMARKET

1 South Reno

2 Meadowood

3 Airport

4 Central

5 Downtown

6 West Reno

7 North Valley

8 Sparks

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010

Net Absorption New Completions

net absorption Comparison

Office



market Comparisons

offiCe market

tYpe Bldgstotal

inventorYsF

directvacant sF

directvacancY

rate

suBlease vacant sF

suBlease vacancY

rate

totalvacant

sF

vacancYrate

current Quarter

vacancY rateprior

Quarter

net aBsorption

current Qtr sF

net aBsorption

YtdsF

completionscurrentQtr sF

under construction

sF

planned construction

sF

weightedavg asking

rentalrate

DoWNtoWN

a 4 547,696 86,901 15.9% 20,921 3.8% 107,822 19.7% 23.5% (2,057) (11,566) - - - $1.95

B 17 531,459 176,681 33.2% - 0.0% 176,681 33.2% 35.2% 15,519 (33,685) - - - $1.65

c 14 247,845 64,131 25.9% - 0.0% 64,131 25.9% 26.9% 2,655 2,655 - - - $1.04

total 35 1,327,000 327,713 24.7% 20,921 1.6% 348,634 26.3% 28.8% 16,117 (42,596) - - - $1.66

soutH reNo CorriDor

a 34 1,184,006 147,939 12.5% 91,544 7.7% 239,483 20.2% 24.8% 48,957 61,366 - 7,484 - $1.52 B 9 244,511 10,950 4.5% - 0.0% 10,950 4.5% 13.2% 84,693 84,693 73,038 - - $1.20 c - - - - - - - - - - - - - - $- total 43 1,428,517 158,889 11.1% 91,544 6.4% 250,433 17.5% 23.4% 133,650 146,059 73,038 7,484 - $1.47

meaDoWooD

a 35 1,677,131 234,639 14.0% 30,622 1.8% 265,261 15.8% 15.3% 11,471 47,368 - - 15,000 $1.80

B 20 481,317 58,014 12.1% 27,110 5.6% 85,124 17.7% 14.1% (26,939) (37,831) - - - $1.33

c - - - - - - - - - - - - - - $-

total 55 2,158,448 292,653 13.6% 57,732 2.7% 350,385 16.2% 15.0% (15,468) 9,537 - - 15,000 $1.70

CeNtral

a 1 22,200 2,891 13.0% - 0.0% 2,891 13.0% 35.3% - 4,943 - - - $1.50

B 14 438,337 87,818 20.0% 2,550 0.6% 90,368 20.6% 27.0% 27,758 (6,044) - - - $1.30

c 25 473,064 98,947 20.9% - 0.0% 98,947 20.9% 21.5% (165) (1,191) - - - $1.27

total 40 933,601 189,656 20.3% 2,550 0.3% 192,206 20.6% 24.4% 27,593 (2,292) - - - $1.29

airPort

a 1 37,500 - 0.0% - 0.0% - 0.0% 0.0% - - - - 60,000 $-

B 15 427,113 132,485 31.0% 13,104 3.1% 145,589 34.1% 30.9% (13,428) (17,745) - - - $1.12

c 11 323,836 69,409 21.4% - 0.0% 69,409 21.4% 21.5% 255 (7,494) - - - $1.02

total 27 788,449 201,894 25.6% 13,104 1.7% 214,998 27.3% 25.6% (13,173) (25,239) - - 60,000 $1.03

sParKs

a - - - - - - - - - - - - - - $-

B 2 31,279 7,507 24.0% - 0.0% 7,507 24.0% 24.0% - - - - - $0.75

c 2 20,768 13,455 64.8% - 0.0% 13,455 64.8% 88.9% - (5,455) - - - $0.93

total 4 52,047 20,962 40.3% - 0.0% 20,962 40.3% 49.9% - (5,455) - - - $0.82

West reNo

a 1 17,728 4,600 25.9% - 0.0% 4,600 25.9% 25.9% - - - - $2.25

B 3 43,100 9,731 22.6% - 0.0% 9,731 22.6% 22.6% - - - - - $2.06

c 6 104,137 7,304 7.0% - 0.0% 7,304 7.0% 7.0% - - - - - $0.97

total 10 164,965 21,635 13.1% - 0.0% 21,635 13.1% 13.1% - - - - - $1.39

suBurBaN total

a 72 2,938,565 390,069 13.3% 122,166 4.2% 512,235 17.4% 19.2% 60,428 113,677 - 7,484 75,000 $1.66

B 63 1,665,657 306,505 18.4% 42,764 2.6% 349,269 21.0% 22.4% 72,084 23,073 73,038 - - $1.26

c 44 921,805 189,115 20.5% - 0.0% 189,115 20.5% 21.4% 90 (14,140) - - - $1.14

total 179 5,526,027 885,689 16.0% 164,930 3.0% 1,050,619 19.0% 20.5% 132,602 122,610 73,038 7,484 75,000 $1.45

marKet total

a 76 3,486,261 476,970 13.7% 143,087 4.1% 620,057 17.8% 19.9% 58,371 102,111 - 7,484 75,000 $1.71

B 80 2,197,116 483,186 22.0% 42,764 1.9% 525,950 23.9% 25.6% 87,603 (10,612) 73,038 - - $1.35

c 58 1,169,650 253,246 21.7% - 0.0% 253,246 21.7% 22.6% 2,745 (11,485) - - - $1.12

total 214 6,853,027 1,213,402 17.7% 185,851 2.7% 1,399,253 20.4% 21.7% 148,719 80,014 73,038 7,484 75,000 $1.49

QuarterlY Comparison anD totals

Q4-10 214 6,853,027 1,213,402 17.7% 185,851 2.7% 1,399,253 20.4% 21.7% 148,719 80,014 73,038 7,484 75,000 $1.49

Q3-10 212 6,853,027 1,325,899 19.3% 158,053 2.3% 1,483,952 21.7% 21.7% 3,093 (68,705) - 7,484 75,000 $1.49 Q2-10 212 6,853,027 1,332,320 19.4% 154,725 2.3% 1,487,045 21.7% 21.1% (38,746) (71,798) - 7,484 75,000 $1.51 Q1-10 210 6,853,027 1,297,407 18.9% 150,892 2.2% 1,448,299 21.1% 20.7% (33,052) (33,052) - 7,484 75,000 $1.52 Q4-09 210 6,853,027 1,262,826 18.4% 152,421 2.2% 1,415,247 20.7% 20.8% 8,726 (128,611) - - - $1.52 Q3-09 209 6,853,027 1,236,255 18.0% 187,718 2.7% 1,423,973 20.8% 20.8% (222) (137,337) - - - $1.54

Office



decades, the average work space has decreased. it is currently a 6’ x 8’ area which is less than half of what it was in the 1970’s and 1980’s, when the average work station was 10’ x 10’. in addition, some office users are encouraging employees to work from home and only use the office for client meetings. this is coupled with advances in technology that reduce the need for certain employees and reduce the space required for servers.

While it continues to be a tenant’s market, lease rates seem to have bottomed out. most consummated transactions have been a turnkey build-out’s with the owner footing the cost of construction for the tenant improvements. We have started to see new entrepreneurs spawned by the recession and we hope this trend continues to encourage the creation of new businesses as job creation is the key to a full recovery.

GarDen offiCeWhile the statistics in buildings over 10,000 square feet reflect a turnaround, the Garden office market did not fair nearly as well. the garden office sector is dominated by small local firms which were the hardest hit sector of our economy. it appears many of these firms threw in the towel in 2010 and as a result the vacancy rate for garden office increased to 27.3 percent at the end of 2010. this is up nearly 31 basis points from the vacancy rate of 24.2 percent posted at the end of 2009. as expected, an increase in vacancy was coupled with a negative net absorption of 27,834 square feet. this negative net absorption was mitigated by the lack of new construction. for the first time since we have been tracking the garden office statistics, there were no new buildings completed in calendar year 2010. Presently, there is a 4,700 square foot medical office building under construction at monte Vista Village at the corner of fourth street and mcCarran. We anticipate this building will be finished in the first half of 2011.

the average asking rate for the garden office buildings ended the year down at $1.43 per square foot (psf) on a modified gross basis. this was a two cent decrease from the end of 2009 and we expect to see the asking lease rate for garden office to fall another 10 percent before it hits bottom due to the immense amount of existing vacancy.

the majority of the activity in the garden office sector has been in the form of owner-user sales. the existence of bank owned buildings coupled with low sBa 504 rates create a great opportunity for office users who are able to buy. most of these buildings are selling for half or less than half of their replacement cost. one example is 423 W Plumb lane, a 4,670 square foot building that was purchased in early December by an owner-user. the sales price was $80 per square foot based on the usable square footage of the building, which is 3,200 square feet on the first floor. this was the lowest sales price per square foot, as most sales for owner-user buildings were in the $100-$150 per square foot price range for built-out space.

surprisingly, the sBa 504 rate has been on a steady increase since its low of 4.62 percent in september of 2010. the rate as of february 2011 was 6.07 percent, which is the highest rate since 2008. this increase was due to the spike in the ten-year treasury rate coupled with the yield increase due to the heightened default rate, since the sBa 504 notes are packaged and sold as investments. While low rates have been another incentive for owner-user buyers, the recent rates are indicative this incentive may be coming to an end.

We anticipate the garden office market will have another rough year as the Northern Nevada office market begins its slow recovery.

Colliers international | reno

tim ruffinmanaging [email protected]

John staterresearch [email protected]

10765 Double r Blvd.suite 100reno, Nevada, 89521

tel +1 775 823 9666faX +1 775 823 4699


this report and other research materials may be found on our website at www.colliers.com. this quarterly report is a research document of Colliers international – reno, NV. Questions related to information herein should be directed to the research Department at 702-836-3781. information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof.




uniteD states:


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asking rate by submarket

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

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$1.60

$1.80

Downtown south renoCorridor meadowood Central airport sparks West reno

askinG rent bY submarket

Office



land market review haVe We reaCheD the bottom Yet? all of us have been asking this question for a year or two; “Have we reached the bottom yet?” With regards to land, it appears so. Building permit activity for single-family homes in the reno/sparks area has increased slightly, the number of land transactions also increased, and in some cases land was purchased and a new building was constructed in the same year. it may be safe to say that we have hit bottom and we should see an increase in sales and land values while bank-owned transactions begin to decrease in the months to come.

During 2010, we saw the number of lot transactions increased to 4,400. in some cases, these lots were taken back by the bank and later sold to the highest bidder. the number of new lots created through subdivision maps and parcel maps, minus reversions to acreage, netted 81 new parcels.

the blue line, in the table below, represents the number of new parcels created by subdivision and parcel maps. the reno/sparks/Washoe County area peaked in new lot creation in 2006 with over 9,000 new lots. this supply of new lots dropped to 81 for 2010. in some cases, this is a result of subdivion maps going through a reversion to acreage process. overall, fewer maps were recorded in 2010. the red line represents the number of new single-family building permits, which peaked in 2005 with over 5,000 permits issued. in comparison, only 460 permits for single-family residences (sfr) were issued in 2010. the yellow line represents the number of single-lot transactions that have increased, almost steadily since 2003. in 2010 that number increased to roughly 4,400. By looking at the lines for sfr permits and the number of new parcels created, it is very easy to conclude that we are at the bottom.

market inDiCators

Q4-10projected

Q1-11

lanD sales

lanD priCes

neW DeVelopment

lanD listinGs


Year end review | land

lanD transaCtions for Washoe CountY

81

4400

3717

9004

460

5324

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003 2004 2005 2006 2007 2008 2009 2010

Year

Number of transactions

Number of New ParcelsCreated

Number of sfr Permitsissued



builDinG permit aCtiVitYreno saw the number of single-family residential building permits increase to 351 which is an 11.0 percent increase from the prior year. in sparks, the single-family residential building permit count is nearly the same this year as it was last year.

overall, the total number of single-family building permits is down slightly for the entire Washoe County area by less than 9.0 percent. Compared to prior years, the building permit activity decreased by 43.0 and 53.0 percent for 2009 and 2010, respectively. in our estimation, building permit activity for homebuilders hit the bottom in 2010.

Who bouGht lanD in 2010?on the entitlement side of land development, in 2010, we began to see average prices for finished subdivision lots rise to nearly $40,000. in 2009, lewis Homes paid approximately $25,000 per finished lot in Pioneer meadows. in 2010 they sold 33 lots to lennar for a little more than $30,000 per lot. this illustrates that in one year, their value increased by 21.0 percent. more than 1,200 partially finished and finished lots changed

ownership. We believe lot prices will continue to gradually increase this year as the finished lot supply dwindles.

the most notable land transactions for 2010 over $2,000,000 are listed in the table below.

industrial prices continue to be influenced by those in the tahoe reno industrial Center (triC) located fifteen miles to the east of the reno/sparks area. last year, triC had only three industrial land sales, averaging $3.60 per square foot.

land values in triC, on average, peaked at $3.87 per square foot in 2008. the average price has ranged from $1.53-$3.87 per square foot during the last seven years.

Please note that the number of parcels sold has decreased each year since 2005. these numbers may increase once usa Parkway is extended to us 50 near stagecoach. Work on this project should start in 2011 if funding is obtained through the state of Nevada and storey County.

siGnifiCant aCtiVitY for first anD seConD Quarter 2010

siGnifiCant lanD transaCtion

purChaser seller DeVelopment loCation no. of lots priCe

Nevada Pacific Development James stack, Jr. Nevada Vista subd. incline Village 5 $12,687,000

o'Neal family trust flintlock trust lakeshore Blvd. incline Village 2 $11,800,000

eaa Holdings llC sGP Development inc. No. Virginia and Vista radeal reno 1 $5,500,000

David Pick family Partnership Branch Banking & trust Co. riata subdivision in Wingfield sparks 162 $3,200,000

P51 llC real asset locators inc. anderson acres reno 13 $2,225,000

fNBN Virginia lake Virginia lake Crossing llC Virginia lake Crossing reno 3 $2,041,901

Williams electronics Games inc. DP Partners trademark llC Double Diamond area reno 1 $2,009,205

N NV asset Holdings llC silver Club Victorian square sparks 7 $2,000,000

reno Golden Hills Catron ranch owner llC Golden Hills Ph 1 reno 150 $2,000,000

total $43,463,106

8080

395

395

Pyra

mid

Hig

hway

SUBMARKET MAP KEY

ID SUBMARKET

1 South Meadows

2

3 Southwest Reno

4 Downtown

5 Airport

6 West Reno

7 Sparks

8 Northwest Reno

South Meadows

Meadowood

Southwest Reno

Airport

Sparks

NorthwestReno

West Reno Downtown

tahoe-reno inDustrial Center inDustrial lanD solD

Year no. of lots solD aVe. lot size (sf) aVe. lot size (aC) aVeraGe priCe per sf aVeraGe priCe per aC

2004 13 815,588.40 18.72 $1.53 $66,687

2005 32 655,233 15.04 $2.14 $93,039

2006 30 604,739 13.88 $2.45 $106,933

2007 27 586,655 13.47 $2.42 $105,629

2008 24 472,503 10.85 $3.87 $168,469

2009 9 416,325 9.56 $2.38 $103,594

2010 3 238,709 5.48 $3.60 $156,720

land



0

1000

2000

3000

4000

5000

6000

2008 2009 2010

Traditional Sales

REO Homes

Short Sales

Total Sales

subDiVision lanD sales for 2010

area No. of lots ave. Cost / lot

south reno 242 $48,660.97

North Valleys 166 $37,014.60

West reno 423 $37,847.73

sparks 413 $35,057.68

total number of lots = 1244

Who built in 2010?People were buying land and constructing buildings in 2010. Despite all we know about vacancy rates and the availability of buildings, people still feel a need to build in some cases.

in January of this year, Wms gaming purchased land on trademark for $12.50 per square foot. in the spring, they began construction on their 53,000 square foot building that opened in the fall.

roy street, owner of reno-sparks Cab Co., purchased the Garden shop land and building on Gentry Way, demolished the existing structure and built an 8,200 square foot building this fall.

in sparks, BJ’s Brewhouse purchased the land at the corner of sparks Boulevard. and east lincoln at legends. in april of 2010, they built their new restaurant, and opened it in the fall.

also in sparks, lennar recently recorded the Garda sudivision, which overlooks the D’andrea Golf Club driving range. they plan to revise the building footprints for this subdivision and may start construction this summer.

in a unique fee-build arrangement between the builder and developer, ryder Homes started a new subdivision at miramonte in the Vistas of sparks. la tierra subdivision models are now open, and ryder Homes is building.

Current status of the resale marketHow did the single-family residential market look for 2010? traditional sales increased to 1,810 which is up from 1,734 the prior year. Bank-

owned, or reo homes, decreased in 2009 to 1,690 homes on the market. short sales, as one might expect, increased by 54.0 percent from 2009.

single-family home values are close to what they were in 2002. according to “the Greater reno-tahoe real estate report” by mitch argon, the median home price for reno in 2002 was $187,900. for sparks, the median home price in 2002 was $169,000. Compared to 2010, reno’s is approximately $180,000 and sparks’ is $164,990. the peak in home values occurred in 2005 when reno’s median home price was $355,000 while sparks’s value was $325,000.

We believe that we will see the following trends in the coming year:

overall land prices, will remain flat, while finished subdivision lots will begin to increase slightly.

New development will virtually be non-existent while the existing parcels are built upon.

land listings will increase slightly due to the cautiously improving economy.

the number of land sales will continue to increase, especially when buyers realize that prices are beginning to increase.

ConClusionHave we reached the bottom yet? almost. Job creation is paramount for our region’s recovery and success in the future. it took us a long time to get to the bottom so the recovery will be longer than any of us like, but overall, we do see a few glimmers of hope and within 3-5 years we will arrive at better times.

reno/sparks sinGle familY home sales

lenDer 2008 2009 2010

traditional sales 2057 1734 1810

reo Homes 1330 2580 1690

short sales 388 1199 1849

total sales 3775 5513 5349

reno/sparks sinGle familY resiDential sales

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Reno Building SF Permits Sparks SF Permits Reno MF Permits Sparks MF Permits

Washoe County SF Permits Washoe County MF Permits Total SF Permits Total MF Permits


researCher:



scott t. barnes, p.e.associateland services [email protected] +1 775 823 9666 www.colliers.com/reno





uniteD states:


tel +1 775 823 9666faX +1 775 823 4699

Ave. Price / SF

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tahoe-reno inDustrial Center aVeraGe priCe per sQuare foot

builDinG permits reno/sparks/Washoe CountY

tahoe-reno inDustrial Center number of lots bouGht/solD

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2011 commercial real estate ForecastFebruary, 7 2010 peppermill hotel casino - the carpi room, reno, nv

tel + 1 775 823 9666fax + 1 775 823 4699


10765 Double r Bvld.suite 100reno, NV 89521

Documents

2011 CommerCial real estate foreCast - Colliers International · 2011 CommerCial real estate foreCast Northern Nevada accelerating success. Year end review and Forecast. colliers