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Industrial space tightens, pushing jobs east

By John Seelmeyer

It’s getting even harder for companies that need giant-sized spaces to find available buildings in the Reno-Sparks area.

The upshot may be longer commutes for some workers whose jobs will be in new buildings farther and farther away from the residential neighborhoods of the Reno metro area.

The Reno office of Colliers International, a firm that specializes in commercial real estate, estimates that only 3.1% of the industrial space in the region was vacant this spring. 

That’s a 45% decline in the industrial vacancy rate during the last year, and the mid-2019 figures themselves had been considered evidence of a tightening market for manufacturing and warehouse space.

Chris Fairchild, a senior vice president with Colliers, notes that the availability of big spaces — the kind of buildings used by internet companies for fulfillment centers, for instance — probably is even tighter than the statistics themselves indicate.

As the economy slowed with the arrival of the COVID-19 pandemic, vacancies started rising in smaller and older industrial spaces such as those found around the Reno-Tahoe International Airport or along Glendale Avenue and Greg Street in Sparks. Fairchild noted small businesses, many of whom have had trouble weathering the pandemic, typically occupy much of that space.

But those smaller, older spaces don’t provide the answer for companies that need the very largest, most modern warehouse-distribution buildings. Fairchild says it’s becoming more difficult to find those jumbo-sized spaces.

One big building — a 518,000-square-foot industrial building about half as big as the Meadowood Mall — was completed this spring in the North Valleys. Additional construction of about 2.8 million square feet of industrial space was under way. That includes five projects of 400,000 square feet or more.

The region has been averaging about 3 million square feet of new industrial construction each year lately, so this year’s construction is fairly typical.

But sites that can be developed for industrial uses are growing increasingly rare in the immediate Reno-Sparks area. And with higher demand and limited supply of attractive space, rents are rising.

Those factors, Fairchild says, are likely to push future construction — and future industrial employment — farther east into Tahoe Reno Industrial Center and Fernley.  TRIC is about 20 miles east of central Reno; Fernley is 10 miles farther out.

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