Office leasing likely to be slow

The office market in downtown Reno, driven last year by local government offices moving into new spaces, may get a little juice this year from relocation of state offices.

But Ken Stark, a partner in NAI Hale Day Gallagher Co., says the amount of space taken by state agencies may be modest as budgettightening takes effect.

Stark last week released a study showing the vacancy rate in 49 downtown office buildings is 15.3 percent.

That compares with a vacancy rate of 11 percent in 461 buildings across the Reno area tracked by Stark's firm.

"Downtown is just going to hold its own," he said.

He said private-sector leasing will reflect the consolidation of some companies which have multiple downtown offices.

The Meadowood region, with a vacancy rate of 7.19 percent in 2.6 million square feet of office space that's more than the downtown and airport regions combined continues as the hottest market tracked by Stark.

The proximity of the upscale housing of southwest Reno accounts for much of the area's strength, Stark said, as executives choose offices close to home.

South Meadows continues to show a high vacancy rate 21.1 percent in Stark's study.

But he noted that the area's total of 931,747 square feet is a fairly small inventory and a big lease or two can change the percentage quickly.