Reno has steadily grown into a technological and production hub, attracting many notable businesses to the area. Part of this upward tick in activity lends itself to Nevada’s benefits for corporate and small businesses. Additionally, the influx of residents in Reno and the surrounding communities has significantly increased the demand for production and service-related industries.
Some have considered Reno to be a mini Silicon Valley as the business landscape swells. Here’s why the region should be on your list if you’re looking for “commercial real estate near me”:
The 2022 Milken Report ranked the greater Reno area in the top 20 for best-performing large cities. That puts it in the 2nd Tier among all large metropolitan areas based on a variety of factors, including job growth, wage growth, high-tech GDP, and housing affordability. Several companies who have already relocated to Reno have seen significant decreases in operating costs and employee cost of living. The most notable benefits include:
Not to mention, Reno is geographically situated as a gateway to western transport, making it all the more appealing for those acquiring commercial property for sale. Reno NV businesses have access to 60 Million customers by 1-Day Truck Service, making it a smart investment for both new and expanding companies that ship goods nationwide.
Business aside, Reno offers amazing natural beauty, outdoor enthusiast destinations a-plenty, and affordable housing for you and your workforce. This city has it all, and individuals will enjoy life outside of work thanks to Reno’s healthy balance of activities and cost of living.
The majority of businesses relocating to the Reno area are from the nearby San Francisco Bay Area. On average, Reno is 65.3% cheaper than San Francisco¹. Even after adjusting for income levels and cost of living, your dollar goes further in the Biggest Little City. Here is a cost comparison between both metropolitan areas:
| Table 1 | Reno (NV) | Bay Area (CA) |
|---|---|---|
| Office Lease Rates (Class A) | Reno: $30-39/SF/YR | San Jose: $60-66/SF/YR San Fran: $78-84/SF/YR |
| Average Hourly Earnings | $43.09 | $64.97 |
| Workers Compensation | Average Cost (per $100 payroll): $1.18 Payroll Cap: $36,000 |
Average Cost (per $100 payroll): $2.87 Payroll Cap: NA |
| Utility (elec.) Rates for Medium Sized Office | $0.78/kWh | $0.157/kWh |
| Right to Work State | Yes | No |
Table 1: EDAWN, "Why Reno, Business Cost Comparisons"
Evan Meyer, licensed Kidder Mathews Broker, currently has several commercial properties for sale in the Biggest Little City, along with attractive office space for rent. Reno NV offers numerous benefits that are competitive with other large metropolitan areas, so if you’re considering taking the plunge and calling Reno your new business hub, check out the listings below.
If you are considering relocating to Northern Nevada, a commercial real estate broker can help navigate the process. Evan Meyer is an experienced and qualified broker who strives to help his clients find their ideal space. His main goal is to help businesses reach optimal success, which starts with their location. He works with each of his clients individually to get the best deal possible on their new space.
Buying a commercial property can be exhilarating. Whether you are experienced or a first-time buyer, due diligence is required. Don’t be afraid to ask questions and seek advice from your accountant, attorney, financial advisor, and/or Commercial Real Estate Broker.
An owner-user is a person or entity looking to buy property intended for their own business.
Most owner-users purchase properties with a loan. Below is a general overview of two of the popular lending options available to owner-users.
The SBA or Small Business Administration has several favorable lending options when it comes to buying commercial property. These loans offer long-term, fixed-rate financing up to $5 million. Typically, the easiest way to get approved is to work with your bank, which will partner with the SBA. The most significant benefit of SBA loans is that they require only 10% for a downpayment. They also allow for the option to finance improvements to an existing property. One of the requirements of these loans is that the owner occupies at least 51% of the property.
A borrower can secure a conventional loan with a lien on a property. Borrowers should be aware that conventional business loan terms vary widely depending on factors, such as credit score, business type, and lender. Typically the downpayment for these is 30%. Keep in mind this loan is considered a collateral investment property if you’re not using at least 50% of the building.
You should take the time to talk with your bank or lender to gain greater insight into the benefits of each type of loan. They can provide you with more information to help you find the best financing options for your needs.
It is essential that you evaluate what type of property you are interested in purchasing when browsing all your options.
It is important you make sure the property is properly zoned for your use as an owner-user. Buyers should consider both current and potential uses for a property. Lastly, zoning may also play a significant role when the time comes to sell the property. After all, a seller does not want their property to be restricted to only certain types of buyers.
Consider a property’s size as it relates to your businesses now and in the future. Many entities buy properties that are larger than their current needs. The space that the owner does not occupy can then be leased to a tenant, allowing the building to become an income property.
Even though you think you’ve found the perfect property, it is important to consider external factors. These factors include community development and growth. Remember, a good location now may change in five years. Although there is no surefire way to know what a location will be in the future, analyzing the environment around the potential property is essential to finding the right place.
Do you know if your property is located within a common interest community? Similar to residential HOA properties, common interest communities have restrictions and requirements associated with property ownership. These property types can restrict what you are allowed to do with the property, so you should evaluate all provisions before purchasing. By appropriately evaluating the CC&R, also known as the covenants, conditions, and restrictions, you won’t be stuck with restrictions that hold back the development of your commercial property.
Purchasing property is a time-intensive decision that requires a lot of consideration and due diligence. Get in contact with your local Commercial Real Estate Agent, Evan Meyer, to ensure you make the best choice with your property and get your questions and concerns answered.
GET COMMERCIAL REAL ESTATE SERVICES
*The following article was written by Evan Meyer and curated by Western Real Estate Business. It features information provided by Reno commercial real estate broker Evan Meyer. For more information about Western Real Estate Business, check out their webpage here.
The overall business climate continues to thrive in Reno as the regional economy quickly rebounded from the pandemic fueled recession in 2020. In fact, Reno performed far better than most markets on the West Coast during the past 18 months with low and declining unemployment rates (4.2 percent in August) and expanding job growth (7.2 percent year-over-year). The region’s rapid growth continues as many new businesses move into the area, a trend that accelerated over the past few years. Most relocations come from California, attracted by the strong economic climate and business-friendly policies in Northern Nevada. As one of the fastest growing regions in the U.S., growth is occurring across multiple industries including technology, manufacturing, distribution, financial and healthcare.
The diverse and dynamic nature of the regional economy drives the overall performance of the office market, producing continuous years of falling vacancy and a decade of rising rents, even through the bulk of the pandemic. At the end of the third quarter, the vacancy rate was 7.7 percent, a 130-basis point (bps) drop compared to the previous quarter and a 170-bps drop compared to the same time last year. In fact, vacancy rates continue to decline across all submarkets due to strong demand and tenant expansion throughout the region. As a result, asking lease rates increased nearly 10 percent year-over-year and are expected to see additional growth in the near term. Concessions are holding steady with many landlords offering turnkey TI’s for strong credit tenants. Additionally, net absorption has, gained momentum during 2021 with 245,618 square feet, year-to-date, and 212,295 square feet in 3Q 2021.
The suburban submarkets have been very active during the past 3-4 months, due in large part to high levels of tenant demand. However, with low vacancy rates and a lack of leasable inventory beginning to surface, the supply and demand imbalance will be something to monitor going forward. This trend is especially prevalent within Class A inventory, particularly in the Meadowood and South Reno submarkets with only a few spaces over 5,000 square feet and a small handful between 2,000-5,000 square feet. To illustrate the current and impending challenges, much of the future space availabilities are already in negotiations as expanding tenants are eager to find quality space.
Although strong market fundamentals and pent-up demand typically drives new construction, new office development in Reno remains relatively stagnant as only 523,000 square feet of new office product has been delivered since 2010. There is currently 277,000 square feet under construction (191,000 square feet in Downtown Reno) and an additional 600,000 square feet of proposed projects. However, due to the high cost of construction there are only a couple of significant developments on the horizon.
Lastly, investment market activity is through the roof with active buyers looking to invest in Reno, largely due to recent price increases and the competitive business landscape. While most of the demand has been coming from out-of-state investors, it is becoming increasingly difficult to find available inventory to purchase as there are more buyers than sellers right now. Looking ahead, most of the trends are expected to hold strong as Reno has become one of the hottest markets on the West Coast.
Evan Meyer is an experienced commercial broker that can help you find your ideal workspace.
WORK WITH A COMMERCIAL REAL ESTATE AGENT
While in the process of seeking commercial property leases, it’s common to be unfamiliar with the language or phrases being used. Below are the fourteen common real estate definitions.
Abated Rent
Abated rent, also called rent abatement or free rent is a provision within a property lease agreement that authorizes a tenant to defer rent payments. Abated rent is typically used as a concession to incentivize prospective tenants.
Acceptance of Premises
An acceptance of premises acknowledges the tenant’s confirmation that they accept the property “As-Is” and will take over possession of the premises.
Assignment
A real estate assignment refers to a situation in which the original buyer or tenant (called the assignor) transfers the legal rights and obligations of the purchase agreement or lease to another party (called the assignee).
Building Classifications
Building classifications are the determining factors that define and categorize commercial buildings or structures. Such classifications are based on the property’s usage, location, amenities, and more to denote the condition of the structure for building and municipality authorities. Commercial building classifications include Class A, Class B, and Class C buildings.
CAM (Common Area Maintenance)
Common area maintenance, or CAM, fees refer to the costs associated with operating a commercial building that are billed by the landlord to the tenant. Such expenses include maintaining shared areas such as hallways, stairways, elevators, lobbies, public restrooms, and parking lots. CAM expenses are most common in triple net leases.
Cap Rate
Cap rate, which is short for capitalization rate, is used as a valuation method for real estate investments. Cap rate is calculated by dividing a property’s net operating income (NOI) by the price. The ratio is expressed as a percentage to determine a real estate investor’s potential return on their investment.
Central Business District
The central business district refers to a city or town’s main business area where most commercial property is located.
Coworking
Coworking in real estate refers to a shared workspace that is used by employees from various entities. Coworking usually occurs in large buildings that allow multiple factions to work closely together.
CPI (Consumer Price Index)
The Consumer Price Index, or CPI, is an economic term that measures the average change in prices paid by consumers over a specified amount of time. When it comes to commercial real estate, the CPI is often used as a rent escalator. For example, if a tenant’s monthly rent is set at $1,000 and the annual CPI rate is 5%, the new rent price will rise to $1,050 per month.
Expansion Option
An expansion option is a clause that is negotiated within the lease that gives the tenant preferential rights to expand within the building in which they are renting.
Flex Space
A flex space, sometimes called flexible space, is a hybrid commercial property that includes an office and warehouse space. These spaces are under 5,000 square feet and typically include a warehouse door.
Full-Service Lease
A full-service lease refers to the all-inclusive rental rate included in some commercial leases. This means that the monthly rental rate will also include all operating expenses and building fees such as utilities, property taxes, insurance, and common area maintenance (CAM).
Landlord
A landlord is a person or entity that owns commercial property that is rented or leased to another person or entity.
Landlord Representation
Landlord representation refers to situations when a commercial real estate broker represents a landlord or owner. These real estate brokers help attract the right tenants to a landlord’s property and thereby improves the building’s investment value.
CONTACT COMMERCIAL REAL ESTATE BROKER
Evan Meyer is an experienced commercial broker that can assist with any real estate transaction! See how he can help you today.
When a business is in the market to lease a new location, it will have a list of specific requirements. After all, a business's space is the domain that represents a company's culture, ideas, and reputation. Unfortunately, finding the ideal space in the desired location at the right price can be a challenge. A commercial real estate broker can help through the service of tenant representation.
Tenant representation refers to a commercial broker, a tenant representative, or a tenant rep who exclusively represents a business's interests when leasing a commercial space. A tenant rep is a licensed professional specializing in various properties and helps identify the ideal location while negotiating the best price.
Proper tenant representation is essential for business owners as it can save valuable time and resources. In addition, commercial real estate brokers have the market knowledge to show properties most tenants do not have access to.
Additionally, working with a professional broker to help negotiate a lease provides leverage with the landlord. A tenant representative will also lower your risk of making treacherous real estate decisions by helping guide you through analytical, logical decisions.
Consider the following when searching for commercial real estate for your business:
Timing - One of the first considerations when looking for space will undoubtedly be focused on timing. This encompasses when the lease will commence and for how long. Often, the longer the term of a lease, the more concessions. It is also essential to consider the timing of any needed improvements. For example, is the property turn-key, or will the property require modification? A commercial real estate broker can easily help with planning and negotiating the terms of your contract to accommodate these needs.
Size -The size of the space is not only a consideration in the initial stages of searching for a property but also when planning what kind of space your company needs for the future. A commercial real estate agent has experience helping businesses plan for the size of space needed now and for the future.
Specialized Needs - Some businesses have unique requirements, including high fiber-optic internet, sprinkler systems, or need to be in a stand-alone building. Often time specialized needs will narrow down the options to one or two buildings. Consider these needs when evaluating options.
Location - Aside from budget, location is a decision of the utmost importance. Identify what part of town is ideal for your business. Do you prefer to be in the suburbs, downtown, or a rural area?
It is a commercial broker's responsibility to compile all these elements and help you find the ideal property. The perfect space does not always exist or may be hard to find, but Evan Meyer can help you identify a building that meets all your needs.
Contact Commercial Real Estate Broker Evan Meyer
Evan Meyer is an experienced commercial broker that can help!
Hiring a commercial real estate broker has several benefits. As licensed professionals specializing in various property types, commercial brokers can find the ideal location for your business. Taking into consideration all of your business needs, a commercial broker will also help negotiate the deal on your behalf, saving you valuable time and resources.
The following are five benefits of working with a commercial broker:
1. Market Knowledge: Commercial brokers have access to off-market opportunities. Some buildings are not listed on the market for the public to see, which can limit your options. With a commercial broker, there are more properties available to you.
2. Negotiations: It pays to have someone on your side during negotiations. Having a professional broker negotiating your contract gives you leverage with the landlord or seller. With their experience and knowledge in the industry, commercial brokers can ensure that you get the best rate possible for your space.
3. Lower Your Risk: There is always risk involved with regards to Real Estate. A trained and experienced commercial broker can recognize risky real estate transactions and guide you towards a better solution.
4. Make Analytical Decisions: Browsing for commercial properties can be an exciting and emotional time, which can hinder the decision-making process. It’s common for eager tenants to say yes to spaces that aren’t right for them based on a whim. However, a commercial broker can help put emotions aside, enabling a logical decision.
5. Let's You Focus on Business: A commercial broker takes over the responsibility and stress of finding a new working space so that you can focus on what truly matters, your business.
Contact Commercial Real Estate Broker Evan Meyer
Evan Meyer is an experienced commercial broker that can help!
WORK WITH A COMMERCIAL REAL ESTATE RENO AGENT
Each commercial space in Reno, NV is unique. Properties have different rules and regulations, as well as varying layouts and tenants. Though this is an exciting process, you must stay pragmatic with your decision-making. Start by getting as much information about the property as possible. The following list will help determine whether or not you will be satisfied in a space long-term:
1. Additional Expenses: Other than rent, what expenses are tenants expected to pay? The most common additional expenses owed by renters include NNN fees, utilities, janitorial services, HVAC maintenance, and more.
2. Mechanical Systems: In the event of a plumbing, HVAC or electrical failure, who will pay for the repairs?
3. Parking: How is parking divided up? Are there dedicated or shared spaces? Confirm that there will be adequate parking for your employees and customers.
4. Telecommunications: What telecommunication companies support the building? Is the building wired for fiber optics?
5. Building Management: How is the building managed? Is there a professional property management company or is it done directly by the owners? Also, if building issues come up, what is the process for remedying them?
6. Tenant Improvements (TIs): Is there a TI allowance? Does the landlord have a contractor they prefer to work with? If tenant improvements are needed, what restrictions exist?
7. Building Hours: What are the building’s open hours? Sometimes, tenants do not have 24/7 access to their space. Furthermore, large office buildings often shut down HVAC systems during off-hours and assess additional fees to use them during these times.
8. Other Tenants: Who are the other tenants in the building? Do any non-compete clauses exist?
Contact Commercial Real Estate Broker Evan Meyer
If you need help finding the perfect space for your business to purchase or lease, contact Evan Meyer today.
WORK WITH A COMMERCIAL REAL ESTATE RENO AGENT
A common question I get as a commercial broker is, "how does the tenant improvement process work?" Since most properties will not have a turnkey space for the tenant, alterations are frequently required.
A tenant improvement is a modification made to a space that makes it more operable for the tenant. For example: if a space has three offices, but the tenant needs four, building the fourth office is considered a tenant improvement.
Landlords typically establish a tenant improvement allowance range before listing a commercial space on the market. The actual allowance offered will depend on the tenant's credit strength and the terms of the deal.
1. Landlord Conversion: The landlord will cover all expenses and use their contractor to deliver a turnkey space for the tenant. This is the most common when minimal modifications are required. Landlords may also be willing to offer an entire space conversation for solid tenants.
2. Tenant Improvement Allowance: In this scenario, the landlord would provide the tenant a specified dollar amount of modifications. The tenant then would hire a contractor to do the required work but will always need the landlord's approval before commencing work.
3. At Tenant's Cost: The tenant may be required to cover the entire cost of the needed tenant improvements. This situation may occur when there is weak tenant credit, a low rental rate, a short-term lease, or a landlord's lack of funds. Regardless of the situation, the tenant still needs landlord approval before commencing work. PRO TIP: If the landlord is unable to offer any money for tenant improvements, ask to offset the cost with free rent.
If you need help finding the ideal space and navigating the tenant improvement process, contact Evan Meyer. He can work on your behalf to get the best deal possible.
Determining building classifications is more of an art than a science. There is no formal or international standard. Building classifications change from city to city. Here’s how Reno defines its classes:
Class A buildings are built to impress. These buildings are found in highly desirable areas, constructed with high-quality building materials, and require little if any, deferred maintenance. They typically command the highest rates in the market. Usually, the easiest way to determine a Class A building is by the exterior appearance.
Class B buildings are less impressive than Class A buildings. They are well-maintained and fully functional structures with adequate mechanical, security, and electrical systems. Class B buildings generate average rental rates.
Class C buildings are typically older, outdated, and suffer from deferred maintenance. This is the lowest classification on the spectrum, and these buildings are generally in less desirable locations. They usually need extensive repairs, are structurally obsolete and lack proper technology. Class C buildings get the lowest rental rates and may be more challenging to lease.
Whether you are interested in Class A, B, or C building, Evan Meyer can help. Reach out today!
GET IN TOUCH TODAY
Determining the amount of office space needed is not an exact science. However, there is a formula that can be useful in planning for space required now and in the future. It is as simple as determining what type of office user you are.
Large bullpens with small desks and open seating
80 Square Feet to 150 Square Feet per employee
Traditional office layout with a mix of cubes or open desks and private offices
150 Square Feet to 250 Square Feet per employee
Consists mostly of large private offices
250 Square Feet to 500 Square Feet per employee
The square footage per employee includes common area space consisting of conference rooms and break areas. Typically, the denser the office space, the higher percentage of the square footage is designated to common areas.
If you need help finding the ideal space that meets your needs, Evan Meyer is an expert when it comes to office space. He can help identify a functional space that will work now and in the future.
