A funny thing happened to the Reno apartment market on the way to the No. 12 spot. Actually, two things happened that had a significant impact on the multifamily climate in “the Biggest Little City in the World.” One involves Nevada’s tobacco settlement, and the other involves the high cost of doing business in California. Intrigued? Don’t hang up yet.
In 1999, the state of Nevada created the Millennium Scholarship trust fund, financed by the state’s settlement with tobacco companies. The fund provides $10,000 scholarships to state colleges for Nevada high school students who graduate with a B average. (Before 2006, it was a C average.) The result is a booming student population that’s kept the vacancy rate well below 5 percent every quarter save one since April 2004, said Floyd Rowley, senior vice president of Colliers International’s investment services group in Reno. The University of Nevada, Reno has recorded a 15 percent increase in its student population every year since 2005. The university witnessed a 20 percent increase for the 2004-05 academic year, according to the school’s 2005- 06 strategic plan.
The other factor impacting the market is the relocation of dozens of businesses to the Reno area from California. In 2006, the Reno-Sparks area recorded 3 million square feet of new industrial construction, and warehouse property here experienced the lowest vacancy in a decade, according to research from locally based Miller Industrial Properties.
At press time, about 530 new units— not including 200 student housing beds—were planned in Reno, said Rowley. With low unemployment figures and a population expected to increase by 12,000 in 2007, apartment demand is only expected to grow. Don’t say we didn’t call you.
