2019 CCIM President Carole Brill, CCIM 2019 Commercial Real - PowerPoint PPT Presentation

2019 CCIM President Carole Brill, CCIM

2019 Commercial Real Estate Forecasts Presented by CCIM

Melissa Molyneaux, SIOR, CCIM Senior Vice President | Executive Managing Director Office Services Colliers International, Reno Melissa.Molyneaux@colliers.com 775-823-4674

Key Takeaways Strong sale year Despite a strong year, 2018 ended with negative net absorption and increased vacancy Large blocks of space came on the market Colliers International

Absorption 80,000 60,000 40,000 20,000 - (20,000) (40,000) (60,000) (80,000) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 Net Absorption Colliers International

Vacancy Rate 15.0% 14.0% 13.1% 13.0% 12.3% 12.1% 11.8% 12.3% 11.8% 12.0% 11.0% 11.5% 11.0% 10.0% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Colliers International

Significant Leases Address SF Tenant Type 5340 Kietzke Lane 40,225 Wells Fargo Renewal Charter 4930 Energy Way 38,904 New Communications Expansion & 6995 Sierra Center Pkwy 19,941 Stantec Consulting Renewal Expansion & 5190 Neil Road 17,776 Aerion Renewal 5250 South Virginia Street, Suite 201 16,559 AT&T Inc (HQ) New Sierra Nevada 1625 E Prater Way, Suite 102 15,700 New Corporation Nevada State Medical 9600 Gateway Drive 15,672 New Examiners Board Reno Sparks 4001 South Virginia Street 15,126 Renewal Convention & Visitors 5340 Kietzke Lane, Suite 102 12,026 Gaming Division New 100 W Liberty Street 11,800 Dickson Wright Renewal Colliers International

Average Asking Rental Rates (Full Service Gross) $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 Downtown South Meadows Meadowood Central/Airport Sparks West Reno Colliers International

2018 Completed & 2019 Potential Construction Completed McKenzie Properties is building a 40,000 SF spec building off Kietzke and Neil @ Mountain View Corporate Center – Near Completion 1Q 2019 Charles Schwab 20,259 SF BTS/Spec building in Rancharrah – Done! Two medical buildings: Urology Group on Kietzke and an Oncology Group on Longley – Done! 2019 Potentially Planned Rancharrah Office & Retail Corporate Pointe Double R & Professional Circle Colliers International

Significant Sales Address SF Sale Price PSF 5190 Neil Road 106,130 $14,875,000 $140.16 10375 Professional Circle 79,552 $25,300,000 $318.03 1575 Delucchi Lane 78,204 $7,300,000 $93.35 885 Trademark Drive 77,132 $20,400,000 $264.48 745 W Moana Lane 60,011 $9,000,000 $149.97 328 S Wells Avenue 39,816 $4,400,000 $110.51 236 W 6 th Street 38,456 $5,500,000 $143.02 3500 Lakeside Court 32,040 $2,125,000 $66.32 9895 Double R Boulevard 25,108 $3,400,000 $135.42 Logo denotes a transaction that Colliers International was involved in Colliers International

Significant Sales Address SF Sale Price PSF 6995 Sierra Center Parkway 19,941 $5,500,000 $275.81 9785 Gateway Drive 18,964 $3,925,000 $206.97 5423 Reno Corporate Drive 17,300 $4,966,059 $287.06 888 Willow Street 16,335 $980,000 $59.99 9600 Gateway Drive 15,672 $3,400,000 $216.95 9222 Prototype Drive 15,672 $3,400,000 $216.95 6160 Plumas Street 15,564 $3,500,000 $224.88 5560 Longley Lane 15,316 $4,000,000 $261.16 1475 Terminal Way 15,159 $1,230,000 $81.14 Logo denotes a transaction that Colliers International was involved in Colliers International

2019 Office Forecast Rents CCIM 2019 Vacancy Vacancy Forecast = 8.4% Absorption Construction Colliers International

Melissa Molyneaux, SIOR, CCIM Senior Vice President | Executive Managing Director Office Services Colliers International, Reno Melissa.Molyneaux@colliers.com 775-823-4674

2019 Commercial Real Estate Forecasts Presented by CCIM

Multifamily and Investment Specialist

Multifamily and Investment Specialist Top 5 Purchasers by Number of Units TOP 5 Purchasers by Properties Average Rents, Vacancy and Concessions All AY Tracked Sales for Reno and Sparks All AY Tracked MF Sales All AY Tracked MF Sales All AY Tracked MF Sales Average Wages ALL AY TRACKED MF PROPERTIES ALL AY TRACKED MF PROPERTIES ALL AY TRACKED MF PROPERTIES All AY Tracked MF Sales Total Number of Units Purchased for 2017-2018 Total No. of Transactions for 2017 - 2018 Q1 2016 to Q3 2018 21 to 79 Units in Reno and Sparks 5 to 20 Units in Reno-Sparks 5 Units and above Reno-Sparks Area RENO/SPARKS AREA RENO/SPARKS AREA RENO/SPARKS AREA $60,000 80 units and above in Reno and Sparks Nevada Assembly Nevada Senate 8 700 5 UNITS AND ABOVE 5 UNITS AND ABOVE 5 UNITS AND ABOVE No. of Transactions per Units 5 Units and above 2017: 56 Comps 2017: 17 Comps $55,000 15.00% $1,350 • Rent Increases, Vacancy and Concessions 2017: 13 Comps $1,319 $1,318 TOTAL PROPERTIES: 925 TOTAL PROPERTIES: 52669 TOTAL PROPERTIES: 52669 • Total Properties: 167 2018: 53 Comps 2017: 85 Comps 2018: 15 Comps 2017-2018 Comparison $50,287 2018: 13 Comps • Sales By Unit Breakdown 7 13.33% $50,000 $1,300 Total Comps: 109 2018: 81 Comps Total Comps: 32 Will the US enter the history books in 2019 10482, 20% 10482, 20% 7 60 13.00% 584 600 • Under Construction Total Comps: 26 $46,158 12.35% 56 29, 3% as the longest continuous expansion post 5001, 10% 5001, 10% 6, 1% Total Comps: 166 • Market Highlights $105,940 550 700 $120,000 $140,000 $140,000 $112,146 53 1945? $118,700 11.24% $1,230 $1,250 636 3,500 2700 $115,000 146, 16% 6 498 11.00% $40,000 50 $117,563 500 $1,202 $36,434 600 $120,000 $120,000 $1,194 $100,000 3,439 $98,167 $1,180 3,450 6839, 13% 6839, 13% $110,000 $1,200 492 500 • Interest rate 5 5 5 2500 516 218, 0% 218, 0% 3,411 2431 5 9.00% $61,886 • Resurgent economy led by increases 40 500 $100,000 $100,000 $30,000 400 2361 3,400 $105,000 • Record new inventory $80,000 Job Growth $1,150 454 $1,111 7.14% 344 • Home Ownership barriers 5-20 Units - Existing 5-20 Units - Existing 5-20 Units - Existing coming to market 2300 • 4 SJR 14- Proposes to amend the Nevada 450 Price per Unit Price per Unit Price per Unit 7.00% $94,304 $92,585 4 3,350 $100,000 400 • Political climate $80,000 $80,000 No. of Units No. of Units No. of Units are high 21 to 79 Units - Existing 21 to 79 Units - Existing 21 to 79 Units - Existing Constitution to revise certain provisions relating 6.17% Price per Unit 30 293 No. of Units $1,100 300 • New Construction costs $1,066 $60,000 80 units+ - Existing 80 units+ - Existing 80 units+ - Existing $20,000 to property taxes. $1,054 258 2100 3,300 $95,000 • Commerce Tax- CAM/RUBS above $4mm 21 to 79 Units - Under Construction/Approved 21 to 79 Units - Under Construction/Approved 21 to 79 Units - Under Construction/Approved 300 $60,000 $60,000 4.82% $1,029 4.65% 4.65% 4.65% 5.00% 3 175, 19% 400 considered taxable revenue 80 units+ - Under Construction/Approved 80 units+ - Under Construction/Approved $1,050 80 units+ - Under Construction/Approved 20 3.80% 3,250 $90,000 569, 61% 24 Units $40,000 17 200 • NRS 237.090 - New Chapter 14.3- Requires large $990 1900 15 $10,000 200 $40,000 $40,000 2.93% 2.79% commercial, institution and Multifamily 13 13 3.00% Nevada Governor 2 2.41% 3,200 2.35% $85,000 $1,000 2.30% 2.24% 2.23% buildings to annually benchmark energy and 350 1.98% 1.97% 1.84% 10 1.58% $20,000 1700 water consumption. 100 $20,000 $20,000 100 1.17% 3,150 $80,000 • Inclusionary Zoning (housing)- requires or 1.00% $950 $0 1 Q1- 2016 Q2- 2016 Q3- 2016 Q4- 2016 Q1- 2017 Q2- 2017 Q3- 2017 Q4- 2017 Q1- 2018 Q2- 2018 Q3- 2018 2016 2017 2018 2019 Forecast incentivizes private developers to designate a 30129, 57% 30129, 57% 300 1500 3,100 0 $0 $0 $0 $75,000 0 certain percentage of the units in a given 0 2017 2017 2017 2017 2018 2018 2018 2018 5-20 Units 21 to 79 Units 80 units+ 5-20 Units 21 to 79 Units 80 units+ project 0 Epport, Richman & Veneto Capital DiNapoli Capital Partners Hi-Tech Dental Care NB Private Capital Units Units Units Units Sale Price/Unit Sale Price/Unit Sale Price/Unit Sale Price/Unit Vacancy Consession Average Rents 2017 2018 Robbins, LLP Management, LLC MJD Capital Partners, LLC Action Properties, Inc. Century Park Apartments Llc Humboldt Reno LLC JRK Investments LLC

Jessie Rich-Greer MSRE, CCIM, CPM Trusted Advisor to buyers, sellers and owners Jessie.Greer@avisonyoung.com 775.332.7309

2019 Commercial Real Estate Forecasts Presented by CCIM

2019 Industrial Commercial Real Estate Forecast Chris Fairchild, CCIM, SIOR

Key Takeaways • Northern Nevada continues to see strong activity from manufacturers and distributors • Gross Absorption – 5.6 million square feet • Net Absorption – 2.2 million square feet • Industrial construction in Northern Nevada remained strong in 2018 at 2.4 million square feet • Lease rates and sale prices continue to climb due to lack of product. Vacancy at 5.67% Colliers International

Gross vs Net Absorption Colliers International

Vacancy Rate Colliers International