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

Absorption

(80,000) (60,000) (40,000) (20,000)

• 20,000

40,000 60,000 80,000 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Net Absorption

Vacancy Rate

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

Significant Leases

Address SF Tenant Type

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

Average Asking Rental Rates (Full Service Gross)

$0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 Downtown South Meadows Meadowood Central/Airport Sparks West Reno

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

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 6th 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

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

2019 Office Forecast

Rents Vacancy Absorption Construction

CCIM 2019 Vacancy Forecast = 8.4%

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

• Resurgent economy led by

Job Growth

• Home Ownership barriers

are high

• New Construction costs
• Interest rate

increases

• Record new inventory

coming to market

• Political climate
• Rent Increases, Vacancy and Concessions
• 2017-2018 Comparison
• Sales By Unit Breakdown
• Under Construction
• Market Highlights

Will the US enter the history books in 2019 as the longest continuous expansion post 1945?

Multifamily and Investment Specialist

2.30% 1.98% 2.24% 2.93% 2.23% 1.17% 2.41% 3.80% 1.97% 1.58% 2.79% 12.35% 6.17% 4.82% 1.84% 7.14% 2.35% 4.65% 4.65% 4.65% 11.24% 13.33% $990 $1,029 $1,054 $1,066 $1,111 $1,194 $1,202 $1,180 $1,230 $1,318 $1,319 $950 $1,000 $1,050 $1,100 $1,150 $1,200 $1,250 $1,300 $1,350 1.00% 3.00% 5.00% 7.00% 9.00% 11.00% 13.00% 15.00% Q1- 2016 Q2- 2016 Q3- 2016 Q4- 2016 Q1- 2017 Q2- 2017 Q3- 2017 Q4- 2017 Q1- 2018 Q2- 2018 Q3- 2018

Average Rents, Vacancy and Concessions Q1 2016 to Q3 2018

Vacancy Consession Average Rents 3,411 3,439 $94,304 $112,146 $75,000 $80,000 $85,000 $90,000 $95,000 $100,000 $105,000 $110,000 $115,000 3,100 3,150 3,200 3,250 3,300 3,350 3,400 3,450 3,500 2017 2018 Price per Unit

• No. of Units

All AY Tracked MF Sales Reno-Sparks Area 5 Units and above 2017: 85 Comps 2018: 81 Comps Total Comps: 166

Units Sale Price/Unit 56 17 13 53 15 13 10 20 30 40 50 60 5-20 Units 21 to 79 Units 80 units+ 5-20 Units 21 to 79 Units 80 units+ 2017 2018

All AY Tracked Sales for Reno and Sparks 5 Units and above

• No. of Transactions per Units

Total Properties: 167

454 492 $98,167 $118,700 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 300 350 400 450 500 550 2017 2018 Price per Unit

• No. of Units

All AY Tracked MF Sales 5 to 20 Units in Reno-Sparks 2017: 56 Comps 2018: 53 Comps Total Comps: 109

Units Sale Price/Unit 636 516 $61,886 $105,940 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 100 200 300 400 500 600 700 2017 2018 Price per Unit

• No. of Units

All AY Tracked MF Sales 21 to 79 Units in Reno and Sparks 2017: 17 Comps 2018: 15 Comps Total Comps: 32

Units Sale Price/Unit 2361 2431 $117,563 $92,585 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 1500 1700 1900 2100 2300 2500 2700 2017 2018 Price per Unit

• No. of Units

All AY Tracked MF Sales 80 units and above in Reno and Sparks 2017: 13 Comps 2018: 13 Comps Total Comps: 26

Units Sale Price/Unit 569, 61% 175, 19% 146, 16% 6, 1% 29, 3%

ALL AY TRACKED MF PROPERTIES RENO/SPARKS AREA 5 UNITS AND ABOVE TOTAL PROPERTIES: 925

5-20 Units - Existing 21 to 79 Units - Existing 80 units+ - Existing 21 to 79 Units - Under Construction/Approved 80 units+ - Under Construction/Approved 5001, 10% 6839, 13% 30129, 57% 218, 0% 10482, 20%

ALL AY TRACKED MF PROPERTIES RENO/SPARKS AREA 5 UNITS AND ABOVE TOTAL PROPERTIES: 52669

5-20 Units - Existing 21 to 79 Units - Existing 80 units+ - Existing 21 to 79 Units - Under Construction/Approved 80 units+ - Under Construction/Approved

24 Units

7 5 5 5 4 1 2 3 4 5 6 7 8 MJD Capital Partners, LLC Action Properties, Inc. Century Park Apartments Llc Humboldt Reno LLC JRK Investments LLC

TOP 5 Purchasers by Properties Total No. of Transactions for 2017 - 2018

584 498 344 293 258 100 200 300 400 500 600 700 Epport, Richman & Robbins, LLP Veneto Capital Management, LLC DiNapoli Capital Partners Hi-Tech Dental Care NB Private Capital

Top 5 Purchasers by Number of Units Total Number of Units Purchased for 2017-2018

5001, 10% 6839, 13% 30129, 57% 218, 0% 10482, 20%

ALL AY TRACKED MF PROPERTIES RENO/SPARKS AREA 5 UNITS AND ABOVE TOTAL PROPERTIES: 52669

5-20 Units - Existing 21 to 79 Units - Existing 80 units+ - Existing 21 to 79 Units - Under Construction/Approved 80 units+ - Under Construction/Approved

Nevada Assembly Nevada Senate Nevada Governor

• SJR 14- Proposes to amend the Nevada

Constitution to revise certain provisions relating to property taxes.

• Commerce Tax- CAM/RUBS above $4mm

considered taxable revenue

• NRS 237.090 - New Chapter 14.3- Requires large

commercial, institution and Multifamily buildings to annually benchmark energy and water consumption.

• Inclusionary Zoning (housing)- requires or

incentivizes private developers to designate a certain percentage of the units in a given project

$36,434 $46,158 $50,287 $55,000 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2016 2017 2018 2019 Forecast

Average Wages

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%

Gross vs Net Absorption

Vacancy Rate

2018 Top Leases

Address Tenant SF Use

9550 N. Virginia Street S & S Activewear 802,113 DST 555 Milan Drive Confidential 566,875 DST 550 Boxington Way ITS Logistics 271,152 DST 9460 N. Virginia St. #B SupplyHouse.com 190,871 DST 375 Cabela Drive Masonite 182,000 DST 870 Trademark Elite Spice 174,493 MFG 1450 E Greg Street Tranzonic 136,025 DST 12055 Sage Point UPS 132,275 DST

26

2018 Investment Sales

27

2018 Top Industrial User Purchases

2018 Completed Construction

2019 Projected Construction

Build to Suit vs Speculative Construction

Industrial Construction

2019 Industrial Forecast

Rents Vacancy Absorption Construction

2019

Commercial Real Estate Forecasts

Presented by CCIM

2019

Commercial Real Estate Forecasts

Presented by CCIM