Heinz Ranch

Heinz Ranch DressingThe 1700 acre Heinz Ranch property changed hands in an off market deal for just under $20M on 7 January 2016. The site spans both sides of the White Lake interchange on 395 in the North Valleys.

The Conceptual Plan calls for 3800 single family units, just under 700 multifamily units, and a few million square feet of industrial / distribution / retail.  2 new school sites are included in the conceptual plan.  A very similar plan unraveled in 2007.  Pricing is targeting the $250-400,000 markets, with an average of $315,000.

The sale includes approximately 1700 acre feet of agricultural water rights (deed of trust says 4034, but those might not all be “proven”).  If those can be converted to domestic use, another 1300 AF of water will be required by final build-out.

It is a huge project, and though I don’t agree with many of their project assumptions – anyone who disses Spanish Springs over commute issues hasn’t driven 395 lately – I think it will be a success.

Heresy

I do not believe anymore that N Virginia Street can be save, and it should be left to die until the legacy land owners get a reality check and devalue their properties to a level where redevelopment pencils.

This is a gross oversimplification, but the mega casinos killed NVA, and it is their problem to save it if it is to be saved at all.  But why would Caranoville care when they have their sky bridges allowing their patrons to keep off the evil streets of Reno?  Do they even want pedestrian improvements in front of their properties?  It would be a poor business move for them.

Reno needs to stop taxing these properties in Special Assessment Districts, and let outlying downtown properties develop.    Let it roll!

Downtown Ownership

Over Reno

Reno AerialThis aerial of Reno/Sparks from the Space Station made NASA’s list of 15 top photos of 2015.  Purdy!

  • Legends Bay Casino – remember the 1000 room Legends Bay Casino promised on the shores of Sparks Marina?  It got pared down to 800 rooms, 600 rooms, 300 rooms, and then a Special Use permit for 200 rooms was approved 2013 and has now expired.

Sparks Casino

There has been a lot of easement work happening, and Olympia Gaming recently filed this PARCEL MAP dividing their holdings into 3.  Given the detailed boundaries of the new 2 acre parcels, I think retail is replacing the casino.  FYI, 2 acres is what it takes to build a standard 15,000 SF CVS or similar big box retail store.

  • 775 California Avenue, the White House, finally sold for $1,425,000 after a whopping 1292 days on Zillow.  Half the original asking price.

775 California

 

  • 580 Gonowabie in Crystal Bay is currently the most expensive home on the Reno Sparks MLS at $39,750,000, and it is just 6 Power Ball numbers from being mine.  HERE is the drone video to close the deal – the ultimate in real estate porn.
  • The retail spaces at 3rd Street Flats aka Kings Inn Jr. are on the MARKET with rates “negotiable”.  The brochure gives the first hints of how the residential lobby and amenities will layout.  No interior access to the dog walk area?  I’ve got a post started on predictions for 2016, and I think that 3rd Street Flats is going to live up to its name – flat.  1 bedroom rents are going to have to pro forma over $2000 per month, and I don’t see the market in that location.
  • Another prediction – North Virginia Street will continue to decline.  The Carano’s don’t want customers leaving their dens of inequity to wander the streets, Harrah’s is in BK and certainly doesn’t have any intention of improving their plaza not to mention their hotel and casino offerings, the old-time owners and their estates are satisfied with their current returns, land prices are wildly 400% over market, Siegel will continue his negative impact on the strip, and in the end, the locals just don’t need NVA when we can bypass it on Sierra and Center.  It’s embarrassing to be rotting from the core, but I don’t see any forces present or future lining up to forestall the inevitable continued decline into irrelevance.  Downtown will continue to move towards being a second Park Lane Mall success story.
  • You readers have any predictions for the coming year?

Montage Retail

Montage Retail ExThe long (forever) vacant ground floor retail space at the Montage sold on Friday.  The deeds haven’t populated on the Recorder’s site yet, but the price appears to be $700,000 based on the transfer tax paid.

The FLYER listed the retail spaces at 22,000 SF, so the price was just under $32/SF.  That is raw land value.

The buyer is Commercial Montage LLC, a newly formed entity with Stacie Mathewson listed as a Manager.  Stacie is best known for her Foundation  and Transforming Youth Recovery.  I guess that means no Ruth’s Chris Steakhouse.

Surrounding Verdi

Verdi RailThe dominoes are falling into place to totally surround Verdi with new, dense development.  Two new legacy properties around Gold Ranch have recently hit the market, Stremmel East and Stremmel West.

Both properties were included in Reno’s spectacularly misguided W 4th Street TOD plan.  Both properties lie within the Tourist Commercial Gateway zone, with MINIMUM residential density of 30 units per acre.  While the W 4th Street TOD has been suspended, the zoning remains and in fact there is no density cap whatsoever now.  This is a developer’s dream and a community nightmare.

1401 Midtown

LobsterIt has been called many things (1401 South Virginia, COV, the old Heritage Bank Building), but 1401 Midtown is the new official name of the project.  And what a project it is going to be!  You should see construction barriers and dirt moving next week.

What’s the project all about?  New outposts for local businesses.  The existing 9000 SF building will be renovated, and joined by a new 12,000 SF addition.  The tenants on board are:

Bristlecone Holdings – New HQ for this exponentially growing local tech firm.  Their algorithms are blowing FICO scoring back into the Stone Age.

Morgan’s Lobster Shack – The demand for this Truckee restaurant and seafood phenomenon to expand here into Midtown has been incredible.  Will work for lobster rolls!

SDL Jewelry – This is a new offering from the owners of Reno favorite Michael’s and Son’s and will be the largest independent jewelry store in Reno.

T4 – This could be you.  A2 occupancy on the second floor with elevator access and overlooking the Plaza.  Distillery, Brew Pub, Tech HQ, Yoga, Jimmy John’s or whatever you want it to become for your business plan.

Chic – Fil- A

Marie'sFamily Values to replace family values.  Closed on Sundays to respect traditional values, according to their required Special Use Permit application.

CFA seems to have successfully compartmentalized their chairman’s recidivist politics from their corporate mojo.  I hope so – their product is to die for.  Welcome to Reno.

Unbuilt Midtown

Ho Hum EighthHo Hum was almost ours, but we lost out in a semi corrupted court ordered bidding war. Instead of up to 5 stories with new retail and lofts, we have another Hobotel forever.  Could have been THIS with SF loft plans like THIS.

VAT (Virginia Arroyo Tonopah) is the existing Statewide Lighting Showroom that no one has ever been inside to make a purchase.  But the owners won’s sell just yet or probably ever.  I had it pegged as 38,000 SF of ground floor retail and enough parking to support a downtown Trader Joe’s.  32 or more lofts above.

Midtown is in a bind right now.  There is endless money chasing zero viable projects.  The old money owners keep holding on out of inertial or dreams of an unrealistic paydays.  The new owners that have acquired property like the Porno Theater dude are investor backed with no skin in how Midtown plays out.  So I just get to sketch and dream about urbanizing my little piece of the Biggest Little City.

West Reno Developments

sTETSON2Lots of action on the West Side of town right now.

Boomtown Industrial – the proposed 885,000 SF Industrial / Manufacturing building just north of Cabela’s has been approved by the Planning Commission.  The length of a small airfield, Dermody properties will purchase and develop the project after all entitlements are in place.  Dermody are good people, which is some consolation.

Meridian 120 – Meridian 120 is the residential portion of the Boomtown project west of the industrial property.  It has been submitted a Special Use Permit and some minor annexations, and is projected to be 273 single family units.

West Meadow Estates – West Meadows has also submitted their SUP for 324 single family units.  Like Meridian, the project is likely be be sold a Lennar type after entitlements are in place.

Park Place – Park Place is a 44 unit apartment project off Robb adjacent to the new memory care center.  It has been a decade since there has been new apartment construction in the NW, though I assume these will be mapped for condo conversion.

Montebello 2 – This project is the partially developed apartment pads just west Home Depot and the existing Montebello apartments.  This will be an interesting story to watch play out.  The original developer sold off this 41 acre property during the first Dot Com Bomb, and deed restricted the property to single family development that would not compete with their apartment project.  Reno has the property zoned MF14 multi family.  Duets or for sale townhouses might be able to satisfy both requirements.

Starbucks – Just about to break ground with a store and drive thru at Robb and Sharlands (technically Ambassador) between Maveriks and the new Hampton Inn.

West Reno Development-page-0

Reno has a neat, interactive map of development projects going though the Planning process.  Below that is the link to the DRMs (Development Review Memos).  The DRMs are often the first public notification about some pretty major projects, and are worth checking out monthly.

Status Check

BUBHey.  I’ve been busy, so limited posts.  More on where busy later.  “Sparks” will fly!

So where is the Reno market right now?  No empirical data in this post, just my gut reactions after following every sale for the last decade or so.

There was a sales blip early this Summer in the $400-600K range, particularly in new construction.  Lots of out of area buyer.  That momentum seems to be petering out rather quickly.  I sense it was mostly speculation, with a fair number of tech relocates thrown in.  Now, we are back in the seasonal market of jaded old homes hitting the market where the photos scream “dead people”.

If you are a 1st time buyer, be warned that credit standards are tight and you will be bidding up against the investor class.  If you are the investor class, be warned that you are bidding up home prices way over any reasonable rent/own ratio.  If you are a landlord, the above forces put you in the driver’s seat.

Where is the new product to house our expected new workforce requirements?  There are some incremental developments moving up the development chain, but nothing of Regional significance.  The developers with shovel ready projects are actually slowing down new product in anticipation of massive price appreciation in 2016.

What do you all sense?

Follow

Get every new post delivered to your Inbox.

Join 277 other followers