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Reno Multifamily
According to Len Ramos and Alex Mellinger, associates for CB
Richard Ellis’ multi-housing group, the greater Reno,
Nevada, area is experiencing such strong population growth and
expansion that the multifamily sector is hurrying to catch up.
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Ramos |
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“Developers have recognized the need for more housing
of all types and classes, from low-income to high-end, including
senior community, assisted living and student housing,”
say Ramos and Mellinger. “Most recently, the largest build
out has been larger Class A/B and tax credit projects. There
is a new focus on senior community and assisted living [facilities]
as three new projects are currently approved.”
The biggest factor in the growth of the Reno/Sparks and Lake
Tahoe areas is tourism. This base economic generator for northern
Nevada ensures job and population stability and spurs growth
which, in turn, stimulates demand for residential housing. In
recent years, Reno has diversified its appeal from that of being
just a gaming destination. Ramos and Mellinger say that some
significant developments affecting tourism in the area include
projects such as ReTrack, the relocation of surface railroad
tracks in downtown Reno for aesthetic and revitalization purposes;
the Special Events Center, a state-of-the-art facility that,
when completed, will service upwards of 7,700 people in Reno’s
core; the restoration of the Truckee River district to enhance
its attractiveness and increase its recreational use; and the
renovation and expansion of the city’s convention center.
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Mellinger |
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With such growth, it’s little surprise that multifamily
development in Reno is occurring in just about every direction.
In the south, the South Meadows Business Park/Damonte Ranch
area, which encompasses the Reno Tahoe Tech Center and a Wal-Mart
Supercenter, is sure to attract apartment development. To the
north of town, along U.S. 395, three apartment communities have
been constructed near General Motors’ new parts distribution
center and the Nevada Spectrum Business Park.
The five large apartment properties built in the area in the
last 18 months include Villas at D’Andrea (256 units),
The Bluffs (300 units), Bristol Bay Phase I (264 units), Canyon
Vista (256 units) and Silver Lake Phases I, II and III (678
units total). Currently, Whittell Pointe (120 units) is under
construction, Bristol Bay Phase II (250 units) is soon to be
started and 1,869 other units are approved but not yet built.
Ramos and Mellinger list Concord, California-based Silverwing
Development; Colorado Springs, Colorado-based Ekland Development;
and Houston, Texas-based Sterling Student Housing as multifamily
developers that are new to the Reno market. Such apartment developers
are eyeing future development further west along I-80, to the
south along U.S. 395 and to the north on Pyramid Highway in
Sparks. Ramos and Mellinger say that the submarkets experiencing
the most growth are northeast Sparks and south and northwest
Reno.
Rental rates in the Reno/Sparks area continue to increase. The
current overall average rental rate of $792 per month represents
a 3.4 percent increase from last year and an 8.2 percent climb
in the past 2 years. The current average rental rates are $680
for one-bedroom/one-bath units, $857 for two-bedroom/two-bath
units and $969 for townhouse offerings. The current vacancy
rate for the Reno/Sparks area is 4.63 percent.
“Many real estate professionals predicted higher vacancy
rates at around 7 to 10 percent at the beginning of 2003 because
many families were buying single-family homes with very inexpensive
debt and there was a sizeable pipeline of new multifamily development,”
say Ramos and Mellinger. “However, absorption for new
apartment properties has been healthy, normally reaching stabilization
within 1 year. Local employment growth has mitigated the predicted
increase in vacancy for the Reno/Sparks area.”
©2004 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints of
this article contact Barbara
Sherer at (630) 554-6054.
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