With the vacancy rates going down, apartment rents going up and the projected growth of the community over the next five years there will be a need for more housing developments.
Five panelists gathered at the NAIOP's Development Forum Tuesday, Feb. 23 at the Atlantis to discuss development issues in northern Nevada.
Panelists at the forum included Doug Roberts, partner at Panattoni Development Company, Inc., Michael Dermody, chairman and CEO of Dermody Properties, Matt White, CEO of Basin Street Properties, Chip Bowlby, managing partner of Reno Land Development, and Denny Williams, regional president for Meadows Bank. Kidder Mathews' Michael Nevis moderated at the event.
Many of the panelists agreed that downtown is a target area for development and redevelopment as well as North Valleys, South Meadows and Tahoe-Reno Industrial Center.
Dermody singled out Boomtown as a good area for industrial development due to its proximity to California, which appeals to manufacturers.
"For us, we are after national and international companies for our buildings and when that starts slowing down we'll feel it."Doug Roberts,Panattoni Development Company, Inc
"Right now it is a sub-market we are very excited about," Dermody said.
However, a main focus of the discussion was residential development and the need for more multi-family housing.
"For me it is about housing," White said. "We need to find a way to support the employees we all think are coming."
According to Bowlby, there has to be a balance of market rate and affordable housing.
"Construction costs are going up and we think it is going to continue to go up," Bowlby said.
According to White, he thinks that there will be a slow down in the market in the next couple of years. However, he feels that residential development will be insolated from this decline in the market due to the projected growth.
"I think we are going to feel it in North Bay and in Sacramento," White said. "I don't think Reno is going to feel it. I think they are in their own little world right now because we are all so focused on the (upcoming growth)."
However, industrial developers like Panattoni anticipate that the area will feel a change in the market over the next couple of years.
"For us, we are after national and international companies for our buildings and when that starts slowing down we'll feel it," Roberts said.
Nevis asked the panel if Reno was becoming over regulated. While many of the panelists agree that Reno is fairly streamlined when it comes to regulations Dermody pointed out that more regulations are coming.
"There is a tidal wave of regulation coming from California," Dermody said. "We should have a discussion about what regulations we don't want and share with city officials."
White brought up concerns about the large amount of projected growth in northern Nevada and if the region is ready for this growth.
"In Reno we are so far behind in a lot of ways and a big fear for me is that we screw up this Tesla thing," White said. "It is not just about homes, it is schools and churches and office spaces and everything. "
According to Dermody, the area needs to have good infrastructure and processes in place so that the companies and people who are coming to the region can see it is sustainable in the long term.
"Times are good right now," Dermody said. "We need to set up checks and balances for developers and what the city does to ensure that the next cycle will be as good if not better to where we are now."
The panel also discussed concerns for K-12 education in northern Nevada with the projected growth rate.
"If you are Mr. CEO and Mrs. CEO and they are coming to town and they have kids, I think there are going to be concerns on their part about how their kids are going to be educated," Williams said.
From a lenders perspective, Williams says he is "cautiously optimistic" about the outlook for residential development.
"If you believe what EDAWN is saying, all these folks that are going to be moving here and the population going up to 60,000 in five years ... these folks have to live somewhere," Williams said.