— By Justin Basie President of Real Estate, Mark IV Capital —
While the Reno-Sparks Metropolitan Statistical Area (MSA) is best known for its gaming-tourism industry, its location in Northern Nevada also appeals to fans of the outdoors.
In addition, Reno’s diversified economy readily attracts Fortune 500 companies that are targeting the area for their manufacturing and distribution efforts. This, in turn, drives the massive growth of Northern Nevada’s industrial sector, generating overwhelming demand for warehouse, logistics and manufacturing space in the region.
The following fundamentals have positioned Northern Nevada and the Reno-Sparks MSA as ideal destinations for logistics, manufacturing and other industrial activities:
• Population Proximity
The MSA is conveniently located within a one-day trip of major West Coast cities like Los Angeles, San Francisco and Portland, Ore. Thanks to an efficient infrastructure network that includes major highways, two railways and the Reno-Tahoe International Airport, companies can reach a vast 80 percent of the Western U.S. population in less than 24 hours.
• Business-Friendly Climate
Nevada is consistently ranked as a top 10 state for conducting business because of its pro-business regulatory environment, low-cost start-up fees, and streamlined licensing and approval processes. Nevada also offers a favorable tax environment for those looking to start business practices in the state, as there’s no personal or corporate income tax.
• Quality of Life
Northern Nevada’s key factors driving residents to the region include a relatively low cost of living, temperate weather and access to outdoor recreational activities. These amenities help generate population growth, much of which is skilled labor.
Washoe County’s total population is 502,193, representing a 3.2 percent increase since 2020. Furthermore, according to the Bureau of Labor Statistics’ August 2023 figures, the region’s job growth was 3.7 percent, with a 4.5 percent unemployment rate.
The Industrial Sector Story
As a result of the strong market fundamentals, more than 200 companies have relocated, established or expanded their operations in Northern Nevada. Companies like Polaris, Petco, eBay, Zulily, Intuit and Sherwin Williams have all carved out a presence in the region. Further cementing Northern Nevada as a hub for business and industry, Tesla’s massive Gigafactory is located just east of Reno, while Apple has data centers nearby.
Companies migrating here from other areas require state-of-the-art logistics, warehouses and manufacturing centers. During the past three years, this trend resulted in high demand for industrial space, which boosted absorption and rents while exerting downward pressure on vacancies.
As of third-quarter 2023, industrial space completions pushed vacancies to just over 6 percent. However, the Reno-Sparks MSA continues to experience healthy absorption numbers due to solid demand from companies seeking high-quality industrial space. Well-located new industrial buildings will outperform due to their ability to better meet the needs of today’s industrial users.
Mark IV Capital’s Victory Logistics District, a 4,300-acre site in Fernley, Nev., will continue to address the growing demand for Class A industrial assets in the Reno market. Mark IV acquired the Opportunity Zone acreage in 2019 when multiple manufacturing and distribution users identified Northern Nevada as an important hub in their logistics planning. Victory Logistics will offer premier industrial buildings ranging from 170,000 square feet to 1.5 million square feet.
The project is poised to enable convenient, swift delivery routes for tenants, as the location offers crucial proximity to major highways like U.S. 50, Interstate 80 and the future Interstate 11. It is also uniquely well served by both the Union Pacific and BNSF railways, which will be supported by a planned transload facility as part of the development.
Upon full completion, Victory Logistics District will be home to more than 25 million square feet of speculative and build-to-suit logistics, distribution, manufacturing and data center space.
Beyond the Tourism
Reno continues to attract plenty of visitors and businesses thanks to Northern Nevada’s strong fundamentals, signaling robust ongoing demand for industrial space as corporations continue targeting the region for their operations.