Northern Nevada’s retail market continues to evolve, shaped by new population patterns, rising construction costs, and shifting tenant priorities. While national brands dominate new developments, investment opportunities are also emerging for smaller centers and adaptive reuse projects.
NAIOP Northern Nevada gathered three regional experts to explore what’s driving activity in the market, which areas are attracting the most interest, and what may lie ahead.
Shawn Smith, Executive Vice President at Kidder Mathews
Ian Cochran, Partner at Logic Commercial Real Estate
Morgan Randis, Senior Vice President of Development at The Barclay Group
What types of retail tenants are most active right now, and what’s driving demand?
Shawn Smith: Grocery stores, department stores, and warehouse-style retailers are extremely active. They’re targeting gaps in the market (Spanish Springs, South Reno, Northwest Reno) and their presence often attracts additional fast-casual, sit-down, and quick service restaurant (QSR) tenants. We’re also seeing significant growth from dental operators like Aspen Dental and Pacific Dental, as well as fitness brands ranging from boutique yoga to Planet Fitness.
Shawn Smith
Morgan Randis: We’re seeing demand from grocery anchors, QSRs, banks, and car services, most of them national tenants. Our 47-acre development in Sparks, interest has been high across the board. In-fill shop space is where local tenants tend to land, but the drivers of activity are still major national brands.
Ian Cochran: We’ve largely shifted away from working with national tenants directly and are focused more on investment sales. Right now, there’s strong demand for unanchored strip centers between 18,000 and 50,000 square feet. Rents are often well below market, and buyers see opportunity for growth.
Morgan Randis
How would you characterize current tenant expectations around lease rates and terms?
Smith: Rents are higher than we’ve ever seen, averaging around $2.25 per square foot. That’s pushing tenants toward longer terms, like 7- to 10-year leases, in exchange for more tenant improvement dollars. But triple nets are also rising, driven by increasing property taxes, insurance premiums, and maintenance costs.
Randis: We’re not seeing any relief on the development side. Land and Construction costs remain expensive, which supports higher rents continuing into the near future.
Cochran: On the redevelopment side, we’re seeing rents jump from $1.25 to $2.50 per square foot on some centers. Tenant improvement allowances range from $20 to $60 per square foot depending on the deal. Lease terms are generally 5 to 7 years. Ten-year terms are harder for local tenants to justify.
Ian Cochran
What areas of Northern Nevada are seeing the most retail development or repositioning activity?
Randis: Sparks continues to be one of the strongest submarkets. Our Kiley Ranch development is benefiting from surrounding housing growth and interest from national tenants. We’re also seeing activity in smaller markets like Carson City and Minden, where we’ve delivered projects with tenants like Chipotle.
Smith: Spanish Springs is hot. WinCo opened at Stonebrook, and now Panera, Les Schwab, Jiffy Lube, KinderCare, and other national brands are following. Meadowood remains a key trade area, with several tenants relocating within the region to newer centers like Redfield Promenade. That said, older vacancies still exist. Think of the old Circuit City and Sports Authority boxes. North Valleys is also poised for growth due to high housing capacity.
Cochran: Most new growth is happening in fringe areas like Spanish Springs and North Valleys. South Reno and Meadowood continue to see strong leasing activity, but development opportunities are limited due to land constraints.
Are tenants favoring second-generation spaces or pushing for new construction?
Smith: There’s strong demand for quality. Class A centers like Summit and Legends have multiple LOIs on most vacancies. But for older Class B and C centers, demand depends on existing improvements, especially restaurant buildouts, which are expensive to replicate.
Cochran: Ownership mindset plays a huge role. When landlords invest in upgrades, like the $2 million renovation we’re working on, those centers lease up quickly. But if owners are just holding without reinvesting, tenants aren’t biting. That opens opportunities for investors to revitalize those centers and reposition them.
Randis: Corporate tenants prioritize second-generation space. National brands are actively looking for 20,000 to 40,000 square foot boxes they can retrofit. We’re also seeing former bank buildings converted to drive-thru Starbucks or other QSR concepts. It’s often more cost-effective than new construction.
What’s your outlook for the next 12 to 24 months in the retail sector?
Smith: Vacancy is already below 4%, and with tariffs and construction costs still high, I expect limited new construction and a continued focus on national tenants that can afford higher rents. It might feel like more of the same for a while.
Cochran: Investment activity has slowed a bit recently, possibly due to interest rates or summer seasonality, but I expect it to pick up in the coming quarters. There’s still a lot of runway in the unanchored center segment. Anchored centers trade less often, but when they do, they draw a lot of interest.
Randis: Grocery anchored shopping centers, national QSR brands, and shops tenants are still expanding which is what our company is focused on in near and long term.,
Anything else worth noting?
Cochran: Institutional interest in the Reno market is growing. Bridge33’s acquisition of Fire Creek Crossing is a good example. But institutional players tend to look for $25 million+ grocery-anchored centers, and there’s just not a lot of product like that on the market. It’s still largely a family office and regional fund market, but that could shift.
NAIOP Northern Nevada is the premier association for commercial real estate professionals in the region. Learn more at naiopnnv.org.
