‘Vacancy is edging down’: Strong 3rd quarter across Reno-Sparks for retail properties
October 30, 2018
SPARKS, Nev. — The regional retail industry experienced several strong highlights in the third quarter of the year, including lights coming back on at a Sparks anchor property vacant for a decade and the development of a boutique hotel at Northern Nevada's busiest intersection.
Tractor Supply and Harbor Freight both opened at the old Target location in Iron Horse Shopping Center. Target upgraded and moved to Legends in 2008 when that center opened.
Tractor Supply took 38,326 square feet and Harbor Freight took 16,016 square feet of completely remodeled space.
Roxanne Stevenson, senior vice president for the retail services group at Colliers International in Reno, says the Target space was completely gutted so that Harbor Freight and Tractor Supply could build to each chain's national standards.
It's the second location in Northern Nevada for Harbor Freight, which also has a storefront at 3800 Kietzke Lane in Reno. FoodMaxx serves as a primary anchor for Iron Horse Shopping Center. Other recent new tenants at Iron Horse include Firehouse Subs and Starbucks.
It's the third location in Northern Nevada for Tractor Supply, which has additional stores in Carson City and Minden. The old Target location was a natural fit for Tractor Supply because the company desired yard space to complement its retail floor space.
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'Tried and true' in Sparks
Iron Horse Shopping Center is located at the intersection of Prater Way and McCarran Boulevard — one of the busiest intersections in Sparks.
Anchor tenants at shopping centers on three sides of the intersection have shifted from '80s stalwarts such as Longs Drugs, Mervyn's and Gemco to be replaced by concepts such as Big 5 Sporting Goods, Fallas Discount Stores and Ross Dress for Less.
"It's one of the densest neighborhoods in Sparks in population," Stevenson says. "It is an older demographic, but the traffic counts are extremely high. There are numerous multi-family properties all over Sparks that support growth. Legends might be the shiny new retail development, but this intersection is tried and true."
Stevenson handled the original leasing at Iron Horse Shopping Center and neighboring Silver State Plaza to the east when they were first developed. Although Iron Horse has experienced strong backfill, there's still 50,000 square feet of dark space available to lease at the center.
"It's been a long road, but we have made great progress," she says.
Other new retail happenings in Sparks include Lee's Discount Liquor leasing 30,000 square feet of anchor space at the former Ross location at Northtowne Plaza. Family-owned Lee's Liquor is one of the largest liquor distributors in the Las Vegas area with 17 retail locations, but it's the first location in Northern Nevada for Lee's, which was founded by South Korean immigrant Hae Un Lee.
Lee's Discount Liquor is expected to open around Thanksgiving.
Vacancy in Reno Slowly improving
Over in Reno, the final undeveloped corner of the city's busiest intersection is soon to have a new tenant when Home 2 Suites by Hilton opens. The niche hotel at Corporate Point is the fourth project in the city by Laxmi Hotels, which also owns two hotels at Professional Circle in South Meadows and one in northwest Reno off Robb Drive.
And the large vacant space adjacent to the Reno Costco now hosts Urban Air, which leased 24,473 square feet of anchor space for Reno's newest indoor trampoline and adventure facility.
Urban Air represents a growing trend of entertainment venues opening in mid- to large-sized anchor shop space. Examples include Need 2 Speed, which opened in the old Mervyn's location in 2013, and Key and Code Escape Rooms in Sparks near Scheels. The old Sears location at Meadowood Mall also is slated to reopen as an entertainment venue.
Stevenson also recently inked a lease for 511 Tactical, a tactical outfitter and supplier, at The Commons Shopping Center at 6625 S. Virginia St.
Kelly Bland, senior vice president of retail properties for NAI Alliance, says that despite the additions to anchor spaces in Reno and Sparks, overall vacancy still stands at 11.9 percent.
Spaces are filling, but bankrupt retailers have left large dark spaces throughout the region's retail landscape — the retail sector continues to be plagued by the departure of Toys "R" Us and Babies "R" Us, which join Sears in the retail graveyard. The 30,000-square-foot Babies "R" Us space at Firecreek Crossing in Reno was recently listed for lease with Colliers.
Still, the region's overall retail vacancy has improved, Bland notes.
"Vacancy is edging down — vacancy in line shops has come down from roughly 24 percent in the height of the recession to less than half of that today," Bland says. "We have come down a dramatic amount, which means some of the Mom-n-Pop and regional companies are filling those spaces up. Anchors have been a little harder to get the vacancy down.
"Back in 2015, it was at 14 percent, and now it is at 11.86. It has come down a little, but we lost Scolari's and a number of other retailers. We are having a hard time getting traction — it's interesting that this far into the recovery we still are having retailers go bankrupt."