Shopping spree

With 700,000 square feet of new shopping center space completed in 2005 and nearly 1.

6 million square feet of retail projects under construction, the retail sector in northern Nevada is poised for significant growth next year.

Another 2 million square feet of new space is in the pipeline and is expected to add to the retail sector within the next two years.

And with some stores Winan's Furniture, The Good Guys and Shopko closing, Lazy Boy relocating and Petsmart moving there will be more than one-half million square feet of shuttered space on the market.

"As land availability continues to dwindle and development costs escalate, attention will focus on existing properties more and more," says Roxanne Stevenson, senior vice president in the retail division of Colliers International.

As an example, she cites a former Kmart building at Peckham and Kietzke Lane that was renovated and opened with several new tenants this year.

"Fortunately,more new tenants opened than closed," she adds.

Stevenson is optimistic despite worries about rising land and construction costs.As the region continues to lead the nation in job and residential growth, she believes that retail in the Truckee Meadows will remain vibrant throughout 2006.

"We are well positioned for positive absorption, strong tenant demand in good locations, overall low vacancy rates and stable rents," the Colliers executive says.

The retail vacancy rate at the end of this year stands at 8 percent, up from 7.2 percent a year ago, according to Colliers International's research.

High land prices and escalating construction costs have pushed retail rents upward.

Shop space in new centers in prime, street-front and end-cap locations reached up to $3 per square foot, Stevenson says.

Large parcels for retail development sold for as much as $16 per square foot, and some finished pad spaces ready to build sold for as much as $30 a square foot.

Additional expenses such as site costs, water rights, sewer hook-up fees and traffic impact fees have priced some users out of the market, Stevenson says.

Despite the heavy construction of retail space in recent years, research conducted by the International Council of Shopping Centers finds Washoe County has less total retail space per person than the U.S.median.

And this is evidenced by sales growth at existing retailers.

The 900,000-square-foot Meadowood Mall, the only regional mall in northern Nevada, continues to post double-digit sales growth from year to year, its management says.

The mall finishes the year with occupancy well above 90 percent.

For Meadowood Mall, the opening of more shopping centers simply means more opportunities for the customers, says Tony Vail, the mall's general manager.

And the growing retail scene hasn't impacted the sales of mall retailers over the years.

"There was another 2 million square feet of retail built around us and throughout the course of all that expansion of the retail market, we had never once failed to have that growth," says Vail.

The March opening of the new hot kid on the block, the Summit Sierra a 650,000- square-foot upscale open-air lifestyle center means an addition to the existing product mix that's complementary.

"The trend of retail the lifestyle sort has escaped the Reno retailers and so it will be productive in its own right,"Vail says.

Larry Hunt, the manager of Summit Sierra at Highway 395 and Mount Rose Highway, agrees that the center developed by Birmingham,Ala.-based Bayer Properties, which is developing the Summit Sierra, won't cannibalize other sales.

"The Summit Sierra adds to the overall offering in Reno.

We expect to coexist with everyone who is here."

He expects the center will be more than 90 percent leased when it opens in March.

"There's going to be homes built.

So there's continued growth and we expect to benefit from that growth," he adds.