California just did us a massive favor—and they don’t even realize it yet.
At this year’s NAIOP I.CON West conference in Los Angeles, one session in particular made headlines across the industrial development community. It focused on California Assembly Bill 98 (AB 98), a sweeping and controversial piece of legislation that expands design and siting restrictions for logistics facilities, imposes new truck route constraints, and effectively slams the brakes on a big chunk of infill industrial development across the state.
It was a wake-up call for developers and investors who have spent decades navigating California’s land use system. And for those of us watching from across the state line in Nevada, it was confirmation of something we’ve known for a while:
Reno is not the alternative anymore. It’s the answer.
What Is AB 98 and Why Does It Matter for Reno’s Industrial Real Estate Market?
Let’s break this down.
AB 98 is a classic example of legislative overreach passed in haste. In the final days of California’s 2023 legislative session, state leaders "gutted and amended" an existing bill and replaced it with sweeping new language that fundamentally changes how and where logistics facilities can be developed.
Some of the key takeaways from the panel at I.CON West:
And here’s the kicker: AB 98 was passed with almost no industry input. That’s why NAIOP, along with firms like CBRE, Rexford Industrial, and Ware Malcomb, sounded the alarm last week.
The Market Fallout: Entitlement Paralysis, Value Shocks, and a Flight to Certainty
The most immediate result of AB 98? A spike in uncertainty.
Developers are pressing pause on land acquisitions in prime Southern California infill markets. Entitlements that used to take 12–18 months are now stretching into multi-year ordeals with unclear outcomes. And investors—many of whom are already wary of California’s political climate—are re-evaluating their exposure.
As Patrick Schlehuber of Rexford put it, the land that used to trade at a premium for its future development potential now comes with baggage. In some cases, sites that were once the crown jewels of SoCal infill have become question marks. And in this market, uncertainty equals lost value.
In contrast, existing, fully entitled assets may see a short-term boost in value simply because new supply is throttled. But for developers, especially those with large pipeline targets or build-to-suit programs, California just became a minefield.
Why Northern Nevada—and Reno in Particular—is Positioned to Win
While California developers are dealing with policy whiplash, Northern Nevada is sitting steady with shovel-ready land, development-friendly jurisdictions, and direct freeway access to the very markets California is pushing industry out of.
1. Strategic Geography
Reno’s proximity to the Bay Area, Sacramento, and Central California markets is well-known. We’re within a half-day drive of over 10 million people, multiple ports, and major e-commerce hubs. Companies looking to serve the West Coast without having to navigate AB 98’s regulatory mess are starting to view Reno as the ideal alternative.
2. Predictable Land Use Policies
Local jurisdictions in Washoe County, Storey County (TRIC), and Fernley still have control over their planning processes. Entitlements move faster, CEQA doesn't rule the land, and local governments want industrial growth.
Compare that to California cities who now find themselves unable to approve projects they themselves support due to AB 98's state-mandated restrictions.
3. Labor and Workforce Growth
Reno has invested heavily in workforce development, including partnerships with TMCC, UNR, and regional workforce boards to build training pipelines for logistics, manufacturing, and tech-driven industries. The influx of companies and talent is creating a virtuous cycle—and attracting users who can’t find or afford the workforce they need in legacy SoCal markets.
4. Modern, Ready-to-Go Infrastructure
From fiber and electric capacity to water rights and road access, Northern Nevada industrial sites—especially at TRIC, South Reno, and Spanish Springs—are turnkey. Developers can move fast, deliver on time, and hit occupancy deadlines that are impossible under California’s current legislative climate.
5. Investor-Friendly Environment
Whether you’re deploying institutional capital or raising a syndication, Nevada’s regulatory environment offers a level of clarity and certainty that’s hard to find in California. Tax structure, political stability, and local support all create a better investment thesis—especially as California increasingly targets industrial owners and developers with restrictions and fees.
The Bigger Picture: A Shift That’s Been Years in the Making
Let’s be honest: AB 98 is just the latest in a long series of California policies that have made life harder for industrial users, investors, and developers.
But it’s also a tipping point.
Ten years ago, “California flight” was a trickle. Five years ago, it was a trend. Today, it’s a strategy.
We’ve helped tenants exit Southern California for years—citing cost, congestion, and uncertainty. Now we’re seeing the capital follow. And as that capital flows east into Reno, it’s looking for two things: certainty and speed to market.
We can offer both.
Final Takeaway: The Time to Act is Now
If you're sitting on industrial land in Northern Nevada—hold it or improve it. If you’re an occupier struggling to find certainty in California—let’s talk site selection. If you’re an investor wondering where the yield is in a slowing market—Northern Nevada might just be your strongest risk-adjusted return.
The window to get ahead of this shift is open—but it won’t stay open forever. Reno isn’t a secret anymore. And as more developers, funds, and tenants get priced out (or pushed out) of California, the smart money will already be here.
At Street CRE, we help clients navigate regional shifts like this every day. Whether you’re repositioning assets, evaluating a Nevada relocation, or just trying to understand the fallout of AB 98—give us a call. We’ll get you in the zone.
