Office Market Heats Up as Temperatures Cool
The office market in Reno continues to tighten with the third quarter posting a positive absorption of 36,041 square feet, rounding out the year-to-date positive absorption at 77,048 square feet. The vacancy rate continues to decline quarter over quarter from 12.3 percent to 11.8 percent, making it the lowest the market has seen post-recession. Construction continues in the Meadowood submarket with McKenzie Properties’ new office building well underway, along with two other medical office buildings going vertical. We anticipate Charles Schwab will kick off the office construction at Rancharrah with their new building that they will occupy, in addition to having available space. Momentum continued into the third quarter and is anticipated to continue through the end of the year, evident by transactions that are scheduled to pencil in the fourth quarter. Several deals have already been announced, including a 29,490 square foot lease at 885 Trademark Drive to PODS for their contact center. Asking rents held steady this quarter at $1.65 per square foot per month full service; however, with vacancy continuing to decrease it is likely that we will see rents rise.