No sector of commercial real estate has been battered harder during the COVID-19 pandemic than retail.
From big box brick-and-mortar retailers to smaller, locally owned businesses, it’s been hard times for many retailers since the economic shutdown shuttered businesses in late March.
Yet there still are some bright spots in Northern Nevada’s retail industry. Highlights include:
- Foothill Partners, which is redeveloping the old Shoppers Square on Plumb Lane and Virginia Street, is kicking off a new redevelopment project in the former Lowe’s building on Oddie Boulevard.
- KP Golden Valley is in the planning stages for a new retail project on 10 acres at Golden Valley Drive and U.S. 395.
- Tolles Development Company has placed the first few tenants in The Village at Rancharrah, and more are scheduled to open in spring of 2021.
For many retailers, however, the pain of the pandemic is deeply felt — especially among local restaurant and food retailers.
According to Dickson Commercial Group, a few notable permanent closures in Reno over the past few months include: Fourth Street Bistro; Little Nugget Diner; Rounds Bakery; Pirate’s Pizza; St. James Infirmary; Mindful Cupcakes; Fin & Filet; and Luciano’s Italian Restaurant, among others.
Landlords not budging on rents
Gary Tremaine, retail broker for DCG, says food users have been hit especially hard due to mandatory shutdowns and reopening restrictions that limit occupancy. While there’s an expected uptick in vacancy as tenants close their doors, landlords aren’t offering sweetheart deals or perks to retain existing tenants or lure in new ones quite yet.
“We are not seeing landlords being too flexible,” Tremaine said. “They were flexible with the deferred rents that came about for two or three months, but right now rents have stayed steady. Landlords have not done anything to reduce rent, but they might be a little more aggressive on tenant improvements.”
Average asking rents stood at $1.22 in the second quarter, up 2 cents from the prior quarter and a rise of 7 percent from a year earlier, DCG reports. However, the landscape could change if cash-strapped tenants are unable to notch some black ink under COVID-19 operating restrictions.
“Everyone is still trying to figure this out,” Tremaine said. “Landlords negotiated terms with tenants thinking this would be a two- or three-month (pandemic), but now some of those negotiations are coming back to the table because nothing has changed.”
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Source: Northern Nevada Business Weekly