Basin Street sees high occupancy in Reno office space

Home offices may still be the preferred working location for many Northern Nevada professionals, but for those who want to work in an office, downtown Reno is proving the place to be.

Basin Street Properties over the past year has inked 13 new leases totaling just under 50,000 square feet, and the company is seeing occupancy greater than 90 percent across its portfolio of downtown office properties, said Scott Stranzl, chief portfolio officer at Basin Street Properties.

Downtown and Midtown’s flourishing restaurant and bar business has been a primary draw for downtown office tenants, Stranzl told NNBW.

“Reno, particularly downtown Reno, is constantly maturing, and it’s now matured to the point that it has all the amenities within a walkable distance,” Stranzl said. “Walkability is a very important amenity to folks who want diversity and the ability to walk outside their door and go to a variety of dining options.

“The majority of downtown office buildings have maintained a pretty high occupancy over the last four or five years,” Stranzl added. “People generally want to be around other people, and that synergy has really been contagious to attracting more folks to a given building or location.”

Companies that prefer the downtown area historically have been in finance, insurance and real estate, Stranzl said. Many of the region’s largest law firms have also long favored downtown office locations due to their proximity to the courthouses. The leases done at Basin Street properties over the past year, however, show a more diverse tenant mix that includes energy and technology firms and a new location for the Economic Development Authority of Western Nevada at 50 W. Liberty St.

Basin Street Properties, which is headquartered at 300 E. Second St., controls 750,000 square feet of office space in downtown Reno, including 50. W. Liberty St., and 200 S. Virginia St. Basin Street still manages Park Center Tower at 300 E. Second after divesting the asset to a company linked to Reno Aces owner Herb Simon in March of this year. The 15-story office tower includes 977 parking spaces on the first 11 floors, with 136,497 square feet of Class A office space on the top four floors. The parking — heavily used during Reno Aces games — was an important aspect of the acquisition, Stranzl said.

Basin Street Properties also owns Coliseum Meadows on South Virginia Street (46,520 square feet), and manages Thomas Creek office Park in South Meadows (38,182 square feet), and Mill@McCarran (just under 130,000 square feet across five buildings).

The downtown’s central location for the majority of commuters makes it appealing to a wider swath of employees, Stranzl noted. There’s also a captive population among the area’s many new apartment buildings and apartment conversions/renovations.

“It's incredibly centrally located,” he said. “With the ease of access and what the city's done from a health and safety standpoint, we continue to move in the right direction. As the downtown has grown in population, it just feels like a better, healthy and safer environment.

“It’s also the quality of the assets, their views (of the Sierra Nevada), the flexibility, and the amenities within the buildings,” Stranzl added.

Patrick Riggs, vice president of office properties for Dickson Commercial Group, told NNBW that the strong leasing activity across downtown properties is partly a result of companies who are required to return to the office upgrading their office spaces.

“Obviously since the pandemic, there hasn't been a lot of new office development,” Riggs said. “The existing Class A buildings — and a lot of those are located downtown — have benefited greatly from people looking to come back to the office.

“Many of these tenants are expanding, but a lot of them are looking at downsizing and coming to a building or an area that provides more amenities,” Riggs added.

Recent expansions in the downtown office market include Steifell Nicholas, Kaempfer Crowell, and the Nevada Division of Tourism, which expanded from 5,500 square feet to an additional 4,335 square feet of space at 200 S. Virginia. ITS Logistics, which has had its brokerage division headquartered at 50 W. Liberty for more than a decade, also took down more space in the building, Riggs told NNBW.

ITS loves being located downtown, said Riggs, who handles leasing activities for Basin Street’s downtown Reno office portfolio along with counterparts Dominic Brunetti and Scott Shanks.

“They see (being downtown) as a recruiting tool for the brokerage side of their business, which is primarily run through 50 W. Liberty,” Riggs said. “There's just an energy, a vibe in downtown. There's a bunch of restaurants, and after work there's some bars to go to.

“It's about creating more of that kind of quality, especially after the pandemic, that entices people to come back to the office,” he added. “We’ve seen that downtown, and also in the Meadowwood corridor – that’s primarily where we are seeing a lot of the (leasing) activity and a lot of the increased rental prices.”

Landlord flexibility has also helped building owners lure in new tenants, Riggs noted. Basin Street hasn’t been averse to creating smaller spaces that meet the new needs of office tenants who are downsizing while moving up in asset quality.

“Basin Street has done a good job of remaining flexible by demising spaces down when they needed to be demised down and just being aggressive with bringing these new tenants in,” Riggs said. “That's why they’ve seen a lot of success.”

The overall vacancy rate among Reno-Sparks office properties dipped to under 10 percent in the first quarter of 2024, Dickson Commercial Group reports. The lease-up of the former Employers Building in South Meadows accounted for nearly 80,000 square feet of space absorbed. Overall vacancy in the South Meadows submarket, however, still stood at 14.5 percent in the quarter, DCG reports. Direct vacancy among downtown office properties, meanwhile, stood at 12.1 percent.