Known as “The Biggest Little City in the World,” Reno, NV, is located in the picturesque Truckee Meadows area of Northern Nevada. The city has a population of about 264,000 and is the second most populous metropolitan area in the state.
Nationwide, CRE investors and businesses eye Reno as an attractive investment market with stable fundamentals, encouraging growth, and attractive cap rates. Crexi connects interested buyers and tenants with detailed market research, a vast commercial real estate listings inventory, and easy access to Reno brokers.
Crexi proudly serves Reno, Tahoe, Carson City, Washoe City, and the entirety of the Reno-Sparks MSA as the fastest-growing digital commercial real estate marketplace.
The State of Commercial Real Estate in Reno
A popular tourist destination, the city is home to many casinos, hotels, and resorts. Reno also has a thriving business community and is a major center for technology and manufacturing. The Reno-Tahoe International Airport is located just minutes from downtown, and many major highways connect Reno to other parts of the state and country.
All in all, Reno is a great place to invest in commercial real estate. The city offers a variety of business opportunities and has a strong economy. Commercial real estate values project to continue rising in Reno, making it a wise investment for the future.
Reno Regional Breakdown
Reno’s Washoe County’s population increased by more than 15% over the past decade and has surpassed 500,000 residents in the region for the first time ever. Reno trends to be among the fastest-growing cities by 2060, with a projected population change of over 50%:
- Washoe County is home to about 504,000, with 264,000 residing in the city of Reno.
- The population of Washoe County grew by 15.4% over the past decade and by 1.4% year over year, according to the U.S. Census Bureau.
- Reno’s population increased by 17.3% over the past decade, and by 2.1% over the past year.
- Principal cities in the Reno metropolitan area include Reno, Sparks, Fernley, Incline Village, and Virginia City.
- The median age in Reno is 38.9, about the same figure as Nevada and the U.S.
- 62% of the residents in Reno are between the ages of 18 and 64.
Employment in Reno has reached pre-pandemic levels, with Reno boasting a workforce of nearly 236,000. As the Commercial Observer reports, the city is pro-actively attracting high-tech employers, such as the 10 million square foot Tesla Gigafactory in suburban Sparks:
- The GDP of the Reno MSA is $31.7 billion and has increased by more than 52% over the past ten years.
- Unemployment in Reno is 3.4%, according to the most recent report from the Bureau of Labor Statistics.
- Employment in Reno/Washoe County has increased by 1.9% year over year, as reported by Data USA.
- Washoe County has a business-friendly climate with no personal state income tax, no corporate income tax, no estate or franchise taxes, and no inheritance tax.
- Employment sectors in Reno showing the most robust growth include manufacturing, construction, professional and business services, leisure and hospitality, and education and health services.
- Key industries in the Reno metropolitan area include aerospace and defense, health, information technology, manufacturing and logistics, mining and natural resource technologies, and tourism and gaming.
- Reno boasts a diverse employment base with companies such as Tesla, Amazon, Panasonic, Intuit, and FedEx.
- Top employers in Washoe County include Renown Health, Peppermill Casinos, St. Mary’s Regional Medical Center, AMERCO truck rental and leasing, Legacy Supply Chain logistics, and JC Penney Distribution Center.
- Median household incomes in Washoe County have increased by 5.4% over the past year, with median property values rising by 7.9%.
- Nearly 88% of the residents are high school graduates or higher. Over 34% hold a bachelor’s degree or advanced degree (about 25% higher than the rate in Nevada).
- Universities and colleges in Reno include the University of Nevada, Reno; Truckee Meadows Community College, and Career College of Northern Nevada.
The transportation infrastructure of Reno includes three interstate and state highways, passenger and freight rail service, and the Reno-Tahoe International Airport.
Reno Industrial Market
Industrial rents in Reno increased by over 9% quarter over quarter (Q1 vs. Q2) and soared by more than 26% year over year. As Cushman & Wakefield reports, occupancy gains totaled nearly 545,000 SF in Q2 2022, with tenants absorbing the most space in the North Valleys, Airport, and South Reno submarkets:
- Total industrial inventory: 105,265,602 SF
- Average asking rent: $0.71/SF per month, NNN
- Vacancy rate: 0.8%
- Absorption: 1,099,226 SF through Q2 2022
- Key lease transactions by submarket: Sparks, North Valleys, Storey County
- New construction: 305,000 SF completed, with 4,853,658 SF under construction
- Investment sales trends: $156 million in Q2 2022, average sales price $145/SF, with private buyers and sellers accounting for the majority of activity
- Largest industrial submarkets: Sparks, North Valleys, Storey County
Reno Office Market
The Reno office market is boasting positive absorption, with suburban office markets like West Reno and Sparks leading the way, according to the most recent report from Cushman & Wakefield. With no new construction on the horizon and a recovering economy, average office rents in Reno project to continue increasing over the next 12 months:
- Total office inventory: 8,293,785 SF
- Overall average asking rents: $1.90/SF per month, full service gross
- Vacancy rate: 10.5%
- Absorption: 3,646 SF (Q2 2022)
- Leasing activity: 303,592 SF (through Q2 2022)
- Key leases by tenant: Aristocrat Technologies 8,203 SF, Truckee Tahoe Lumber Company 7,404 SF, Carollo Engineers 6,846 SF
- New construction: 0 SF currently under construction
- Investment sales trends: $77 million in acquisitions in Q1 2022, sales price $293/SF, market cap rate 7.7% (NAR Commercial Metro Market Reports Q1 2022)
- Largest office submarkets: Downtown Reno, Meadowood, Central/Airport
Reno Retail Market
Limited retail space for lease in Reno is driving vacancy rate below 5%, the lowest percentage in decades. New retail developments are limited, while recent arrivals to the market are nearly 100% occupied. Here are the most recent Reno retail performance stats from Kidder Mathews market research and the NAR:
- Total retail inventory: 25,627,588 SF
- Average asking rent: $1.58/SF per month, NNN
- Vacancy rate: 4.3%
- Absorption: 66,553 SF (Q1 2022)
- Key leases by tenant: AutoZone 35,000 SF, Five Below 6,500 SF, Voodoo Brewery 4,600 SF
- New construction: 68,520 SF delivered through Q2 2022, with 38,462 SF under construction
- Investment sales trends: $49 million in acquisitions in Q1 2022, average sales price $204/SF, cap rates 5.9%
- Median household income: $76,182, with 67% of households earning $50K per year or more
Reno Multifamily Market
Reno’s gamble to bet big on high tech has paid off in spades. A booming economy has propelled scores of new mixed-use and multifamily projects in areas like Midtown and the University District. According to the most recent report from Kidder Mathews, multifamily rent growth in Reno has increased by nearly 2.9% through Q2 2022, while vacancy remained flat at 2.6%:
- Total housing units: 214,876
- Renter occupied: 40%
- Multifamily inventory: 50,796 units
- Average asking rent: $1,680
- Rent growth: 4.54% year-over-year
- Vacancy rate: 2.6%
- New construction: 1,080 units delivered through Q2 2022, with 3,684 units under construction
- Investment sales trends: Average $209,730 per unit, cap rates 5.1%
- Largest multifamily submarkets: West Sparks/North Valley, Airport, Northwest Reno
- Median household income: $76,182
- Per capita income: $41,942