Development is like technology.
If you think it was fast over the past 10 years, just wait for the next 10 years.
Industrial and office properties house the workforce, and as the work force increases so does the demand for housing.
Following the housing is the retail.
In your mind's eye, imagine: Residential development is booming.
Home values, I believe, are at an all-time high in our area.
According to the Builders Association of Northern Nevada, new home pricing was at an average of $243,000 for a production home.
There are over 51 active new home projects.
Provided job growth remains stable, there are no major terrorist events, interest rates remain competitive and Arnold Schwarzenegger does not screw us up by fixing the governmental policies or economic conditions of California, we will build about 30,000 new homes during the next 10 years.
The population of Washoe County will increase from approximately 360,000 to over 440,000.
That's assuming 2.7 people per household.
Where are all these homes going to be built? Somersett has approximately 2,600 units.
Verdi has plans for about 3,000, Spanish Springs about 10,000 (to La Posada) and Damonte/Curti Ranch 6,000 units.
In the 1,238 acres of Copper Canyon, meanwhile, we're likely to see 1,033 single-family homes, 876 apartments units and 127 acres in a business park.
This does not include "infill development" within the basin of the Truckee Meadows, and we still have one undeveloped major ranch in our area of over 1,700 acres.
Fernley will triple in size as last year they built about 700 new homes.
That is expected to continue.
Big plans are being drawn as well for the North Valleys and Cold Springs areas.
What will limit growth within our Truckee Meadows Basin? Water? No, topography, specifically the availability of buildable land.We'll also be limited to some degree by air quality and wastewater treatment.
Truckee Meadows Water Authority expects that the current supply of water will last until the year 2025.
I would predict that within five years new projects will begin to import water into the North Valleys.
If they can get this importation program on and I bet they will it will involve approximately 35 miles of pipelines and lots of booster pumps.
This water will not be cheap.
Again in your mind's eye imagine: In 10 years south Reno might extend all the way to Washoe Valley, possibly with its own water and effluent treatment facilities.
Imagine, within 10 years you might see residential development all the way from Washoe Valley north on 395 to the California border, from the north end of Sparks to the Pyramid Lake Indian Reservation.
And, as we all know retail will follow the residential population.
What will we do with all the traffic? Currently the following projects are under way:
* The Spaghetti Bowl is being widened.
* The Clearacre and McCarran bridge has been started (a two-year project).
* The Meadowood interchange will be started next year.
* Truck-climbing lanes will be installed this year on U.S.
395 north of McCarran Boulevard and on Interstate 80 west of Keystone.
* Work has started on U.S.
395 to extend the freeway all the way around Steamboat and Pleasant Valley through to Carson City.
This will include one of the nation's most expansive, highest and longest bridges over Galena Creek.
Approximately $180 million is on the agenda for highway construction over the next 10 years.Within 10 years we'll see work beginning or possibly completed for the Tahoe/Pyramid link connecting north Sparks to south Reno.
This project s currently stalled by the NIMBY "Not In My Back Yard" groups.
As for Reno, BRT (Bus Rapid Transit) will link UNR to the Meadowood area.
This project, which has been funded, will use futuristic vehicles that will have their own driving lanes, utilize synchronized traffic signals and computer tracking systems.
New "traffic centers" will be constructed in both Reno and Sparks.
The Reno location will be located east of the bowling stadium, house buses, trains and cabs and offer services such as convenience stores, child care, retail stores, Starbucks, etc.
Both locations should be opened within seven years.
The increased population is not "unplanned." As you can see, local government is planning for the future.
This is all good news, but beware, I believe the key to all this activity is the existing low interest rates.
Demand for investment property and housing is very strong and values have been rising.
Make no mistake: Investors are yield driven.
Just a little increase in interest rates will significantly reduce the yield on a real estate investment and its value.
Overall the future for our area is bright and very exciting times are ahead.
I've been in the business for over 25 years and I truly believe real estate is still the best investment you can make.
In any event, time goes by fast.
Start planning for the future and we'll see what happens.
Rick La May is a senior investment advisor for Grubb & Ellis/Nevada Commercial Group.
A specialist in retail and multi-family properties, he has more than 25 years experience as a real estate broker and investor.This essay is derived from remarks he prepared for the year-end review by members of CCIM, a commercial real estate group, last month.
