The Californian Diaspora - 2/8 

Posted by: Dan Oster
Industrial Specialist

775 336 4665

doster@naialliance.com

 As a member of the Industrial Properties Group, Dan has participated in the sales and leasing of a wide variety of Industrial properties from 1,000 to 700,000 sqft in Northern Nevada. Dan's primary goal is to provide unsurpassed customer service to the clients he represents.

Imagine you're not visiting Reno. Imagine you're waking up to go to work at your company, but your company is now located here in Reno. How would your business life be different?

Let's start with the assumption you work at a Sugar and Confectionery Products company with $5 Million in annual sales. This will allow us to use Biz.Stats.com, a web site that analyzes public filing of firms to benchmark average costs for businesses of a given size in a given industry.

Imaginary day observation #1: Shorter Commute

You left home at the same time as always, but you're at your desk earlier than usual. How did that happen? According to the US Census Bureau, Californians mean travel time to work is 28 minutes. In Nevada, it's only 22 minutes! Your day hasn't even started and you've already saved 12 minutes in your daily commute. 

The Californian Diaspora - 1/8 

Posted by: Dan Oster
Industrial Specialist

775 336 4665

doster@naialliance.com

 As a member of the Industrial Properties Group, Dan has participated in the sales and leasing of a wide variety of Industrial properties from 1,000 to 700,000 sqft in Northern Nevada. Dan's primary goal is to provide unsurpassed customer service to the clients he represents.

Why have Californians been fleeing their state over the past two decades, 200,000 per year, as compared to the 1980s when 100,000 Americans a year were moving into the state? The reasons are varied, but according to Joel Kotkin, one of the nation's top demographers, "the state is run for the very rich, the very poor, and the public employees." Once the tax structure is taken into consideration and the fact that California has the 48th worst business tax climate according to the Tax Foundation, it's no wonder that middle class young families, ages 5 to 14 and 34 to 45, are the top demographic leaving the state.

When it comes to taxes in the Golden State, millionaires pay a top rate of 10.3% (third highest in the country) and middle class workers, those making greater than $48,000 a year, pay a top rate of 9.3%. That is a higher tax rate than what millionaires pay in 47 of 50 states. Those Californians who are rich enough to live in Napa or West LA are still there. Poor Californians, 40% of whom pay no income tax, are sticking around too. Bearing more than their fair share of the burden, young middle class Californians are now en route to other parts of the nation less restricted by bureaucratic red tape and less encumbered by high state income tax.

In the following series of blogs, we'll make the case for why middle class workers, and the companies who employ them, should choose to put down roots in Nevada.

Sales- Buyers of industrial property are out shopping.

Due to interest rates and prices being low for industrial space and with retail property, this has enticed some tenants to become owners. For this reason, sales interest in Q1 of 2012 was primarily from owner/user purchases as opposed to investor purchases of commercial buildings for sale. Sales transactions for the quarter included Merl Jessop's purchase of 40,000sf at 1201 Industrial for $1,400,000 ($35.00/sf), Ellaville Properties purchase of 31,908sf on 6.56 acres at 543 Overmyer for $2,600,000 ($81.48/sf), Fundis Trucking's purchase of 14,000sf on 9.8 acres at 2920 Walthem Way for $2,200,000 ($157.14/sf), Fog City Investments' purchase of 11,240sf at 903 E. 4th Street for $876,720 ($78.00/sf) and Rice Lakes Scales purchase of 5,000sf at 310 Freemont Street for $340,000 ($68.00/sf).

 Contact NAI Alliance at 775.336.4600 for all your commercial lease needs.

New Office Listing - 592 California Avenue

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group is proud to announce a new property listing at 592 California Avenue, Unit A, in Reno, Nevada.

There is 1,450 square feet of office space available.  The lease rate is $1.15 per square foot, full service. 
For more information on this property or to view all listings please visit us at http://naialliance.com/

Industrial Space Showdown

Posted by: J. Michael Hoeck, SIOR

Industrial Specialist

775 336 4621

jmhoeck@naialliance.com

Mike began specializing in industrial brokerage with Colliers International in 1999, and in May 2005, joined Alliance Commercial as a Partner and as Vice President of its Industrial Properties Group. In May of 2007 Alliance Commercial became NAI Alliance and Mr. Hoeck became a Senior Vice President.

Last week, I came across an interesting article in the Wall Street Journal entitled “Industrial-Space Showdown.” Morgan-Stanley and Blackstone Group are both jockeying to take control over a defaulting CalWest portfolio. This is a major portfolio, which includes 23 million square feet of property throughout many of the western states. Currently, industrial space property has a much slower rising value, and this article has brought up an intriguing point about how investors are starting to buy more of these properties around the country. Investors are seeing a future strength in the economy, which will increase the need and value of industrial space. While the deal over who will take control over CalWest’s assets is still undetermined, this article shows a valid point how investors are seeing a change in the market and gravitating towards buying industrial space. Prices are well below replacement and cap rates are 150 to 250 basis points above the values 3 years ago.

-Information Provided by The Wall Street Journal, April 2012

Commercial Rentals- How low can the rates go?

With industrial space vacancy on the rise (see Market Activity- Where are all the big industrial property deals?) rents are still showing weakness with only slight signs of heading upwards and it continues to be the tale of two markets. Class A rents are stable and set to increase when a few more large industrial real estate transactions occur. Whereas Class B & C product still languishes with years of supply. Owners of older product have been on their knees praying for 3 years now. The reduced size of the average transaction (20,459sf compared to 41,205sf from the prior three quarters) helped the cause of Class B & C this quarter. Class A buildings typically do not divide into small increments. So, when transaction volume does well and the average deal size is low, like this quarter, Class B & C product sees greater activity. Of the 20 largest industrial property transactions of this quarter, ranging from 13,800sf to 77,000sf, 15 of them (or 75%) signed within Class B & C buildings. With that in mind, there is plenty of competition amongst owners of older buildings, keeping rents low and many prayers unanswered.

Contact NAI Alliance at 775.336.4600 for all of your commercial lease needs.

Testimonial

"I would highly recommend J. Michael Hoeck because of my recent experience researching and securing commercial real estate. Right from the beginning he was eager and sensitive to my needs and requirements. He always presented himself as a professional and was extremely organized in his presentations. Mike has worked in the Reno area for many years and that was a benefit because of who he knew in the area to get things done."

-Richard Seegmiller, Owner of Truckee Precision

Testimonial

“Advertising was excellent with signs, flyers, internet, and mailers. Your team got the property out to a large geographical area and it worked. Also communication was excellent with conference calls every other week and updates in between.

I would like to thank Mike Hoeck, Dave Simonson, Dan Oster, Mike Nevis, and Stacy Blanton for the great job they did. I will recommend NAI Alliance to anyone in need to sell their commercial real estate.”

-Randy Blackwell, Chickwell Properties, LLC

Market Activity- Where are all the big industrial property deals?

There were 39 deals 5000sf or greater in industrial space during the quarter which is in line with an average quarter. What lacked this quarter were large industrial leases making an impact on absorption. We are still in search of a 100,000sf deal thus far in 2012. Whereas the average deal size over the prior three quarters was 41,205sf, this quarter has seen 20,459sf for total gross absorption of 797,897sf (down 43.2% from the prior quarter). The five largest industrial deals of the quarter were Thrift Books (77,000sf), Wesco’s expansion (67,936sf), National Business Furniture (48,000sf), Patterson Pacific’s expansion (45,100sf) and Webgistics (40,320sf). Positive net absorption in 2011 led us to believe that companies had already downsized/right-sized during 2009 and 2010 and giving the impression 2012 would be another year of positive activity for the Reno/Sparks Industrial Market. To counter the new activity, closures or downsizing announcements from Warehouse Services (224,000sf), Ryder Logistics (130,000sf added to their sublease space), Western America (100,000sf), Hopkins Distribution (100,000sf), Insite Logistics (60,000sf) as well as others show that tenants are not finished giving up space. These actions led to negative net absorption of 499,662sf for the quarter despite three prior quarters of positive net absorption and dropping vacancy.

We’d like to say Q1 of 2012 was an abnormality and that the industrial real estate market is poised to bounce back in the second quarter but there are three more possible announcements of large scale downsizing to come. To offset any new closures, there are three large deals pending and a number of other hopeful transactions set to sign in Q2. Current activity is brisk so hopefully the closures will be differed to other quarters or are outpaced by a slew of industrial users committing to our area. The jury is still out on whether Q2 will be an increase in potential energy for our roller coaster industrial market or a brief leveling out of the ride.

Reno/Sparks Industrial Market 2012 Q1 Review

Industrial properties, as with much commercial real estate, have been riding a roller coaster and the first quarter for 2012 proved to be a dip. We saw more industrial space vacate than absorb as an unexpected number of large tenants either left the Reno/Sparks area or downsized their operations. Vacancy for the quarter increased from 14.6% to 15.3%. Due to the last three quarters of 2011 having shown strong activity in the industrial real estate market, this led to the general expectation for the same in 2012. We anticipated new activity to outpace closures thus increasing net absorption and possibly leading to upward pressure on Class A rents. Given increasing talk of national economic recovery, the first quarter proved to be a step back for industrial properties, but gauging from current activity, we are still confident our end of year numbers will match our predictions.

Distribution Centers Moving Inland

Posted by: J. Michael Hoeck, SIOR

Industrial Specialist

775 336 4621

jmhoeck@naialliance.com

Mike began specializing in industrial brokerage with Colliers International in 1999, and in May 2005, joined Alliance Commercial as a Partner and as Vice President of its Industrial Properties Group. In May of 2007 Alliance Commercial became NAI Alliance and Mr. Hoeck became a Senior Vice President.

Recently the Journal of Commerce published Driving DCs Inland, referring to the movement of automated warehouses inland and away from high warehousing rent of major population centers. According to Forest Research, “U.S. e-commerce should expand 10% annually to $279 billion by 2015;” meaning that more of these automated centers are going to be needed in the near future. Companies are looking for warehouses in states such as Nevada, because of their cheaper labor rates and ease to access large population areas within two days. Northern Nevada has a business climate featuring business friendly tax structures, abundant labor, affordable housing, and a great quality of life. Twenty-five of the top 100 3PL companies operate in Northern Nevada. The large e-commerce companies “employ five to ten times more employees then traditional DC” and many times in these areas people who work for the distribution companies have prior experience. Overall, e-commerce companies are starting to follow the trend of moving their DCs inland and seeing the potential it could hold for their future.

Information provided by The Journal of Commerce Magazine, March Issue.

New Industrial Properties Tenant

NAI Alliance would like to welcome iGourmet to the Reno area. They offer a wide variety of fine foods from aged cheese all the way to walnut oil. They can even ship gift baskets to Europe for anyone who has friends or family living abroad. Visit their site at www.igourmet.com and add some fine cuisine to your menu!

If you are in need of an industrial property or retail property for lease, please contact NAI Alliance for Information on competitive rates on commercial leases here in Reno/Sparks, NV.

Medical Office Space

Posted by: Suzy N. Klass
Associate Office Properties Group
sklass@naialliance.com

Medical office space in Reno is a very interesting topic for anyone in the commercial real estate business who deals in office space. The availability of medical office space in Reno is “dynamic” in nature. And I am not talking about vacancy rates or percent of owner occupied. I am talking about identifying the “ideal” medical office. What would that look like? That model, that ideal, is always changing. Why is that? Because these days, the “ideal” model for how to deliver quality and efficient health care is in flux. So what you might need in square footage, or parking or billing space is all dependent upon the external forces like reimbursements and patient volumes. To be in healthcare in 2012 is to be flexible. Only the most flexible will be able to adapt quickly. In the aggregate, medical office space in Reno also needs to be adaptive. And for any practitioner, evaluating your real estate needs is complicated.

Scott Shanks Takes Home CCIM's Market Forecast Competition Award

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group is proud to announce Scott Shanks, Vice President of the Office Properties Group is the recipient of the Northern Nevada Chapter’s CCIM (Certified Commercial Investment Member) 2011 Market Forecast Competition Award. Shanks successfully predicted the year end office vacancy for 2011 back in 2010.

In addition to winning the forecast competition Shanks presented his 2011 review and 2012 outlook at the CCIM Annual Forecast Year End Review luncheon which took place at John Ascuaga’s Nugget on March 7, 2012.

New Office Listing at Sparks Plaza

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group is proud to announce a new property listing for Sparks Plaza located at 780 Vista Blvd., in Sparks, Nevada.

Currently there is 13,680 square feet available for lease. The lease price is $1.10 per square foot plus NNN. Ideal for office, office medical, lab or geotechnical.

For more information on this property or to view all listings please visit us at http://naialliance.com/

New Office Property Listing for Lease Downtown Reno

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group is proud to announce a new property listing for 100 & 140 Washington Street in Reno, Nevada.

There is 443 square feet up to 5,992 square feet available for lease. The lease price is $1.20 to $1.49/per square foot and is full service.

For more information on this property or to view all listings please visit us at http://naialliance.com/

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group is proud to announce a new property listing for 1351 Corporate Boulevard in Reno, Nevada.

This building has 17,750 sf available for lease. 12,350 sf of office space and 5,400 sf of flex. The lease price is $0.75/psf plus NNN.

For more information on this property or to view all listings please visit us at http://naialliance.com/

New Office Property Listing for Lease

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group is proud to announce a new property listing for 1005 Terminal Way in Reno, Nevada.

This property has 456 sf up to 2,415 sf available for lease. The lease price is $1.00/psf and is full service.

For more information on this property or to view all listings please visit us at http://naialliance.com/

Posted by: Suzy N. Klass
Associate Office Properties Group
sklass@naialliance.com

With so much conversation aimed at our national healthcare issues, I think we forget that in reality, healthcare is extremely local in nature. What I mean by that is that every community has a distinct and unique character in terms of how healthcare is delivered. In addition, there have been studies that show differences in how doctor’s practice that conforms to local traditions and consumer expectations.

So too, is real estate very local in nature. Yes, we study national trends that are tied to economic indicators of the health of our entire country. But we all know the real estate market where we live is unique. How we do business, who the lenders are, what are the expectations of purchasers are all very steeped in local traditions.

“In health care, scholars associated with the Brookings Institution identified 10 of the best hospital regions in the country and then tried to identify common characteristics that could be replicated. There were almost none. Some regions had doctors on staff. Others paid fee-for-service. Some had electronic medical records. Others did not. A separate study of physicians’ practices found much the same thing. There were simply not enough objective characteristics that the practices had in common to allow an independent party to set up a successful practice by copycat alone.” (J. Goodman, National Center for Policy Analysis)

It is my business to identify and be knowledgeable about the national and the local aspects of healthcare and real estate in Northern Nevada. No two communities are alike, or have the same approach to real estate and their healthcare.

The Future of NAI Global

As reported last week, NAI Global, the largest network of independent commercial real estate firms worldwide, announced that its previously reported acquisition by C-III Capital Partners LLC (C-III) has been completed. "The transaction pairs NAI Global’s network of commercial real estate firms totaling 5,000professionals and 350 offices in the U.S. and 55 countries around the world with an even broader range of financial and property management services offered by C-III, including loan origination and servicing," (www.costar.com, 2 Febraury 2012).

The following is an interview between CoStar News and Robert Lieber, Executive Managing Director of C-III, about the recent acquisition and future plans of C-III, as found on CoStar.com (a link to the full article can be found at the bottom of this page).

"CoStar: How does the NAI acquisition fit into your firm’s strategy of building a fully diversified commercial real estate services company?

Robert Lieber: NAI fits very nicely into our strategy, which is building a global, diverse real estate services platform at C-III Capital Partners. It’s a strategy not entirely different or distinct from what Andrew Farkas did in the 1990s when he created and built Insignia Financial Group. We think that the NAI portfolio of members provides us a unique opportunity to service the broader middle market, not just in the country, but globally. It’s an exciting opportunity.

C-III has a portfolio of properties that we are responsible for managing. While NAI Global is going to have to compete for that business on market terms like anyone else, we think that having NAI Global and our platform behind them gives the ability to grow the business and distinguish themselves in terms of the quality of the services they provide.

CoStar: Other than recapitalizing the NAI Global network, what other changes do you have planned for NAI Global? Expanding into more markets? New hires? New service lines?

Bob Lieber: We’re going to capitalize on the strengths of the NAI businesses and identify where we can add additional resources to grow that part of the business. NAI has a global footprint. We’ll want to look at where it makes sense to grow the business internationally as well as concentrate on growth here domestically. With relationships and capital, we think there are pretty exciting ways to grow.

CoStar: Are you planning to make more acquisitions? What opportunities do you see?

Bob Lieber: There are lots of opportunities to continue the growth curve we’re on, whether it be buying other special servicers or buying other property managers or service providers in the real estate business. It’s all very complimentary with what we’re trying to do as we build out our platform. We’re in a growth and acquisition mode. There are many parts to the business that we are considering," (CoStar.com, 2 February 2012).

For full article, click here: EXCLUSIVE: C-III Capital's Robert Lieber on NAI Global Acquisition and Growth Plans

New Walmart in Stead

A new Walmart is coming to town and is set to open in March, according to a recent article on ktvn.com. The new store will be located at 250 Vista Knoll Parkway in Stead. "We are thrilled to add this Walmart to the North Valleys and bring good jobs with career opportunities to the area," said Tim Davis, store manager for the new Walmart (ktvn.com, 1 Febraury 2012).

To see the entire article or learn about employment opportunities, click on the link: New Walmart in Stead Hiring 250 People

Future of Legends at Sparks Marina

NAI Alliance's Kelly Bland of the Retail Properties Group gives his opinion on the $141 Million default on the Legends at Sparks Marina: "Part of the problem facing the Legends development is what is not there: A planned hotel-casino, an RV dealership, a baseball stadium and a dinosaur-themed restaurant, said Kelly Bland, the senior vice president of retail properties for Reno-based NAI Alliance. “The nature of the project of how it turned out to be is substantially different than what was anticipated,” Bland said...As for the notice of default on the $141 million in private financing, Bland said it’s possible RED Development deliberately defaulted on the debt to force the lender group to the negotiation table, a tactic many cash-strapped firms have used since the financial crisis happened more than three years ago.
“My speculation would be they forced this into foreclosure,” Bland said. “A lot of times you need, in today’s day and age with the loans the way they’re handled by receivers, you need to stop paying to get the issue addressed.”" (RGJ, "141 M default at Legends," 31 Jan 2012).
For more of the story, click on the link below to view the entire article: $141 Million Default at Legends

Acquisition of NAI Global by C-III Capital Partners

NAI Global, the largest network of independent commercial real estate firms worldwide, announced today that its previously reported acquisition by C-III Capital Partners LLC (C-III) has been completed. The transaction will help create a leading fully integrated commercial property services company that will operate in markets around the world. Locally based NAI Alliance, is the Northern Nevada representative of NAI Global.

For the full Press Release Click Here.

www.naialliance.com

775.336.4600

Reno/Sparks Office Market: 2011 Year in Review

Written By:

Dominic Brunetti, CCIM

Scott Shanks, SIOR
Chase Whittemore, MS

Looking back to our Q1 2011 report of nearly 12 months ago, the adage repeats itself; activity breeds activity. The Northern Nevada Office Market closes out a two year trend of positive net absorption and a decrease in overall vacancy. Some of the impactful players of 2011 were newcomers to Northern Nevada; Reality Engineering out of California, Fusion Contact Centers out of Arizona and Stifel Nicolaus out of Missouri. The other impactful players were the local staples such as Jones Vargas and Muckel Anderson; two companies that remained downtown, but after a combined 20+ years of tenancy in the former Porsche Building moved out of 100 W. Liberty St. into the Jones Vargas Center at 300 E. 2nd Street. Most people report this good news to inbound companies such as Brightpoint North America and Benco Dental Supply which are absorbing hundreds of thousands of square feet within the advanced logistics niche market. On the other hand, we do not hear enough about companies within the business service sectors such as Consolidated Agency Partners, MyNewPlace.com, Sanare, B&B Medical Services, Enel Geothermal and others that are new to our market or expanding locally, creating an economic impact, diversifying the economy and absorbing office space.

Ending 2011 with a decreasing overall vacancy rate of 17.36%, the office market continues to improve netting positive absorption of 27,200 square feet. Possibly the better news, the funnel of sublease space on the market is diminishing, a tell tale that the general office market is preparing for steady improvement. From a submarket perspective, Meadowood, particularly the Kietzke Lane-McCarran Boulevard corridor, continues to outperform the overall market standing at 14.28% vacancy. Rents within the Meadowood Submarket are exceeding an effective $2.00 per square foot, full service gross. Yet, Downtown recorded the most improvement absorbing nearly 90,000 square feet year over year.

The outlook, although optimism persists, continues to hinge on the growth of GDP, consumer confidence and the woes of widespread deleveraging. These factors, affected gravely by the upcoming election and future legislation, will determine the organic and inbound office space absorption of 2012. Specific market sectors such as alternative energy, tech infrastructure and mining substantiate innovation in the local economy, yet the anxiety level remains high and is the impediment for job creation. Northern Nevada must continue to focus on industry diversification and the quality of life, Reno-Tahoe experience to attract and retain emerging companies.

NAI Global Economic Forecast

Posted by: J. Michael Hoeck, SIOR
Industrial Specialist

775 336 4621

jmhoeck@naialliance.com

Mike began specializing in industrial brokerage with Colliers International in 1999, and in May 2005, joined Alliance Commercial as a Partner and as Vice President of its Industrial Properties Group. In May of 2007 Alliance Commercial became NAI Alliance and Mr. Hoeck became a Senior Vice President.

A frightening graphic from Peter Linneman during the NAI Global Economic Forecast on January 20, 2012. Often we only see trends going back one to four years. This one, however, goes back to the millenium. Hopefully, no matter waht happens with the elections, we will see and feel much needed stability to reverse these tides.

Light at the End of the Industrial Tunnel?

CoStar Advisor Newsletter recently published Is Industrial Property’s Turn Next? Manufacturing Momentum Shifting to U.S., citing several examples of why manufacturing could be picking up. Could this give the Industrial Real Estate Market a much needed boost?

Click here to read the full article.

Q4 2011 Reno/Sparks Industrial Market Report

Posted by: NAI Alliance Industrial Team
775 336 4600

Healthcare Real Estate A Strong Investment Category

Posted by: Suzy N. Klass
Associate Office Properties Group
sklass@naialliance.com

As we turn our gaze to 2012, here is some good news I have to share. An analysis by Jones Lang LaSalle concluded that healthcare real estate will continue to be a strong investment category in 2012. “While no asset class can be considered recession-proof, based on past performance and future projections, healthcare real estate is about as recession resistant as possible which makes it a preferred class today”.

Though many healthcare professionals are in a holding pattern because of the uncertainties in national reforms yet to unfold, my bet is that we will continue to see merger and acquisition activity. We could also see inventories being reevaluated and investment options growing. Stayed tuned. And buckle your seat belts.

Office Properties Group Lease Transactions for November 2011

Posted by: NAI Alliance Office Group

775 336 4600

The Office Properties Group welcomes:

• Navellier & Associates - 1 East Liberty Street, Reno
• Apex Logic Inc. - 200 South Virginia Street, Suite 470, Reno

Reno/Sparks Office Market Q3 2011

Posted by: Dominic Brunetti, CCIM
Vice President

Office Properties Group
dbrunetti@naialliance.com
775-336-4670

Reno/Sparks Office Market (Q3 2011):


Vacancy
The U.S. economy and labor markets start – stop momentum continues to influence the local market of Northern Nevada. Coming off a relatively positive Q2, market-wide vacancy stood still at 17.88%. The one noticeable difference quarter over quarter was the reduction in available sublease space; a sign of master leases expiring and the continuation of companies taking advantage of short term sublease opportunities at advantageous pricing. Neither way presents a fortifying net absorption gain to the local office market.

The long term and very large master leases of the home builders and associated trades that signed during the residential fizz have expired or nearing expiration. This has left those building owners with the decision to market the space in its entirety or to appeal to the Northern Nevada average tenant of 3,000 to 5,000 square feet by employing creative demising plans. Those building owners that have been proactive, such as is the case in the South Meadows submarket, have been able to redesign floor plates and back fill at market rates; an imperative strategy in today’s office market, if the building owner can afford to do so.

Rental Rates
Pockets of the Meadowood submarket, namely the Kietzke Lane corridor, and specific buildings within the CBD, have seen gradual gains in lease rates. Although the free rent concession continues to play its key role, starting lease rates for quality space in these areas have touched the $2.00/sf/mos mark. Quality space in these two submarkets is limited and with no sign of new construction on the horizon, there will be instances when building owners will be able to push lease rates once again.

Overall, Class A office space averages between $1.70 - $1.80/sf/mos. Starting at the top, there is an approximate 20% discount between product classes throughout the Truckee Meadows.