Nevada’s industrial real estate market continues to thrive, bolstered by an advantageous balance of affordability, accessibility, and operational stability. This growth is driven in part by labor cost trends that significantly influence business decisions in the manufacturing, logistics, and distribution sectors, where labor can account for up to 65 percent of total operating costs (F. Curtis Barry & Co., 2024, “Managing Your Warehouse Labor to Reduce Overall Expenses”.)
Labor costs have steadily risen across the Western U.S. over the past decade, becoming a crucial factor in determining where businesses establish or expand operations. Nevada’s measured labor cost growth provides a competitive advantage, especially compared to neighboring states like California, where companies struggling with price increases are looking to reduce expenses wherever they can.
Nevada Manufacturing Labor Cost Trends: 2014 to 2024
Between 2014 and 2024, labor costs for warehouse workers in Nevada rose from $18.90/hour to $23.81/hour, marking a 26% increase. While this growth is notable, it is moderate compared to California, where labor costs surged by 32%, increasing from $21.90/hour to $28.88/hour.
Below is a comparison of labor costs in key Western states over the same period:
| State | 2014 Cost ($/hr) | 2024 Cost ($/hr) | % Increase |
|---|---|---|---|
| Washington | $20.80 | $25.27 | 21% |
| Oregon | $19.40 | $24.65 | 27% |
| California | $21.90 | $28.88 | 32% |
| Nevada | $18.90 | $23.81 | 26% |
| Arizona | $17.50 | $22.43 | 28% |
| Utah | $17.20 | $21.50 | 25% |
| Colorado | $19.70 | $24.54 | 24% |
| Idaho | $17.50 | $22.17 | 27% |
| Montana | $17.00 | $21.68 | 22% |
Nevada’s steady increase in labor costs has enabled businesses to adapt over time, offering predictability that fosters long-term planning and operational stability.
Advantages of Nevada’s Labor Market
Nevada’s business-friendly environment extends beyond its labor costs. The state maintains capped workers’ compensation rates and offers pro-business regulatory policies that both invite new companies and sustain existing ones in the region. These advantages allow businesses relocating from California to save up to $5/hour per worker, preserving proximity to the same key markets while reducing overhead expenses.
For industries such as manufacturing and logistics, these savings can lead to significant cost reductions. Nevada’s position as a cost-effective alternative is further bolstered by its growing industrial infrastructure, particularly in Reno and Las Vegas, which have become major logistics hubs.
Demand for Industrial and Logistics Space
E-commerce and third-party logistics (3PL) growth have tightened industrial real estate markets across Nevada. With vacancy rates shrinking, businesses are willing to pay higher leasing rates in exchange for access to cost-efficient labor markets.
Enter Reno, whose convenient location near major transportation corridors makes it an attractive option for businesses aiming to streamline supply chains, and/or make a seamless transition out of state while maintaining access to existing markets and routes already in place. Las Vegas similarly benefits from its proximity to the Southern California market.
The rising demand for industrial and logistics spaces underscores the need for businesses to act quickly to secure favorable leases, as competition intensifies. Therefore, it’s imperative that businesses looking to relocate find the right broker to swiftly advise, guide, and help navigate the local region to best accommodate business operations.
Nevada’s Strategic Positioning vs. Western States
Compared to other Western states, Nevada offers a unique combination of affordability and accessibility. Its labor cost growth aligns closely with states like Oregon and Idaho but remains lower than the national average in some key areas.
Nevada’s ability to balance operational stability with competitive labor costs makes it a prime destination for businesses aiming to optimize expenses. This advantage has allowed the state to attract manufacturing and logistics operations seeking to reduce costs while maintaining proximity to major markets.
What This Means for Investors and Owners
For owners and investors, Nevada’s industrial real estate market presents significant opportunities. The steady influx of tenants from neighboring states, combined with rising demand for logistics space, ensures a robust pipeline of potential clients. Properties near Reno and Las Vegas, in particular, stand out as high-value investments due to their strong demand and proximity to growing labor pools.
Why Choose Street Commercial Real Estate in Reno
Street Commercial Real Estate offers a deep understanding of Nevada’s industrial market through years of experience- not just as industrial brokers, but as Northern Nevada natives. Whether you're a business owner seeking a cost-effective location or an investor exploring high-demand properties, Street CRE provides the expertise to make informed decisions and move clients towards their commercial real estate goals.
With insights into labor cost trends and market dynamics, Street CRE ensures its clients stay ahead in Nevada’s thriving industrial real estate market. Contact our team today to learn more about available properties and market research tailored to your goals.
The wave of globalization started back in the 1960s and 1970s, as businesses found that moving certain aspects of their operations overseas allowed them lower production and operational costs. For manufacturing companies especially, it became overwhelmingly popular to outsource jobs to outside countries as a cost-saving measure, officially referred to as ‘offshoring’. This trend was driven by the substantially lower wage rates available in countries outside of the United States, coupled with the advancements in transportation and communication technologies which made managing overseas operations more feasible.
However, recent trends indicate that we’ve begun moving the opposite direction- many companies are beginning to bring their operations back to the United States, or ‘reshoring’. This change is motivated by various challenges and strategic needs that have emerged in international business operations.
Factors Driving the Reshoring Movement
Several critical factors are influencing the decision for companies to reshore manufacturing and other services. Firstly, global supply chain inefficiencies have become more pronounced, exacerbated by international crises such as the COVID-19 pandemic. Companies have experienced delays, increased logistics costs, and difficulties in quality control, all of which have encouraged looking closer to home for production.
Inflationary pressures and rising wages in traditionally low-cost countries have also diminished the cost advantages of offshoring. As the economic landscapes in these countries evolve, the gap in operating costs between offshore and domestic options has narrowed, making reshoring a financially viable option.
Geopolitical tensions and economic policies, including tariffs and trade wars, have further influenced reshoring. Companies are increasingly wary of the risks associated with geopolitical instability and are seeking to mitigate these by investing in domestic operations.
Finally, consumer preferences have shifted towards supporting local businesses and sustainable practices. A 'Made in the USA' label tends to attract consumers interested in supporting domestic economy and jobs, as well as those concerned about the environmental impact of long-distance shipping involved in offshoring.
Implications and Opportunities in the Nevada Market
In light of these factors, business owners and operational managers are critically reevaluating their international operations. The move towards reshoring is not only seen as a strategy to reduce risk and potential costs but also as an opportunity to boost brand image and customer loyalty by aligning more closely with consumer preferences and values. As this trend continues to develop, it signifies a notable shift in how companies strategize their manufacturing and production approaches to cater to an evolving market landscape.
The implications for commercial real estate are substantial, particularly in the manufacturing sector, where demand for specialized facilities is on the rise.
As companies increasingly opt to localize production, Nevada is emerging as a hotspot for manufacturing growth. The state, recognized for its robust job growth, finds itself at the forefront of this industrial resurgence. Manufacturing facilities, once outsourced to other countries, are now being constructed at an unprecedented rate within the U.S., leading to a burgeoning demand for industrial spaces that can accommodate modern manufacturing processes.
What does this demand look like? According to the US Census Bureau, construction spending on manufacturing facilities rose to $114.7 billion dollars annually in 2022- a 40% YoY increase and 63% increase over the past five years. As of July 2023, manufacturing spending was 74% higher than July of 2022. The rate of construction of manufacturing facilities across the United States is now outpacing all other types of commercial properties, and indicates a deeper economic shift towards revitalizing the manufacturing industry within the nation's borders. (McLaughlin & Peterson, 2023, MIT Sloan Management Review)
As industries expand and the manufacturing sector receives more spotlight, the implications are substantial not just for the real estate market but also for the job market. The increasing construction of manufacturing facilities is anticipated to generate approximately 350,000 new jobs, significantly impacting local economies (Reshoring Initiative Data Report, 2022). Remarkably, Nevada has emerged as a leader in this aspect, currently ranked #1 in the nation for job growth (World Population Review, 2024).
Manufacturing companies stand at a critical juncture where they can leverage this upward trend. By actively engaging in the expansion and construction of new facilities, they can capitalize on the growing market demand. Moreover, this strategic expansion is not solely about scaling up operations but also about contributing positively to economic growth and employment in the local community.
Strategic Considerations for Nevada Manufacturing Companies
Companies in the manufacturing sector should consider several strategic factors to maximize the benefits of the current market dynamics. First, the selection of location is paramount. Regions like Nevada offer considerable advantages due to their favorable economic policies, infrastructure readiness, and burgeoning workforce. Companies should conduct comprehensive analyses through thorough regional research and consultations with local CRE experts to evaluate the potential of different locations before committing to construction projects.
Moreover, with the rise in job creation, there is a pressing need for these companies to invest in workforce development and training programs. This will not only help in filling the newly created jobs but will also ensure that the workforce is skilled enough to meet the demands of modern manufacturing processes. Partnerships with local educational institutions and the implementation of apprenticeship programs can be effective strategies in this regard.
In conclusion, the construction of manufacturing facilities is a robust indicator of economic vitality and presents numerous opportunities for real estate developers and manufacturing entities alike. By understanding and strategically navigating this landscape, companies can not only expand their operational capacity but also play a pivotal role in shaping the economic future.
Navigating the Future of Commercial Real Estate with Street CRE
In the constantly evolving world of commercial real estate, staying ahead of market trends is imperative for success. For commercial real estate brokers, this isn’t just about being informed; it’s about being proactive in a landscape that’s as dynamic as the clientele they serve. It is crucial that brokers are aware of how these trends can impact market demand and supply to navigate effectively through the complexities of real estate transactions. As the market continues to develop, professional advisors like those at Street CRE remain essential to both seasoned investors and newcomers.
Street Brokers are not only observers, but active participants in the real estate market. This deep involvement provides us with firsthand knowledge of what drives the market, from shifts in economic policies to changes in consumer behavior and technological advancements. Our expertise allows us to foresee potential challenges and opportunities, providing our clients with strategic advice that aligns with current market conditions. Our brokers make it their mission to guide clients through the intricacies of commercial real estate with up-to-date, accurate, and relevant information.
We invite potential clients to reach out for a free consultation to discuss their commercial real estate aspirations. Whether you’re exploring options for investment, looking for a new location for your business, or need insights on the latest market trends, our team at Street CRE is here to assist. We pride ourselves on our strategic insights and client-centered service, ensuring that every client receives a detailed, hands-on experience tailored to their specific needs.
Are you a commercial real estate investor in the Reno/Sparks area looking to maximize your property’s value? Understanding and utilizing a sale leaseback can be a game-changer for your investment strategy. In this article, we’ll delve into what a sale leaseback is, its benefits, and why it might be the right move for you. Our goal is to provide clear and actionable advice to help you make informed decisions and encourage you to reach out to the experts at Street CRE for personalized assistance.
A sale leaseback is a financial transaction in which a property owner sells their property and then the business leases it back from the buyer. This arrangement allows the original owner to continue using the property while converting its equity into capital. Essentially, the owner becomes a tenant, and the buyer becomes the landlord. This can be a strategic move for businesses looking to unlock the value tied up in their real estate assets.
One of the primary benefits of a sale leaseback is liquidity. By selling the property, the owner gains immediate access to cash, which can be invested in other ventures or used to enhance business operations. This influx of capital can be crucial for businesses needing to fund growth, pay off debt, or capitalize on new opportunities-all at a lower rate than many available loans and with higher returns.
Another significant advantage is risk management. By transferring the ownership, the seller also transfers the risks associated with property maintenance, repairs, and market fluctuations to the buyer. This allows the business to focus on its core operations without the additional burden of property management.
Sale leasebacks can also offer tax benefits. Lease payments made by the seller (now tenant) can often be deducted as business expenses. This can reduce the overall taxable income of the business, leading to potential savings. (If needed, let Street CRE connect you with a qualified CPA to discuss in greater detail!)
Operational flexibility is another key benefit. The capital freed up from the sale can be reinvested into the business, providing the opportunity to restructure and optimize operations. This flexibility can lead to improved efficiency and profitability, by way of investing in equipment operations or people to help grow or better manage your core competency.
Owner-occupiers in need of working capital are the ideal candidates for a sale leaseback. These are businesses or individuals that own the property they operate from and could benefit from converting their real estate assets into cash. If you find your business in need of liquidity but still want to maintain operational control over your property, a sale leaseback might be the perfect solution.
At Street CRE, we specialize in providing tailored solutions for both landlords and occupiers. Our team of experts is well-versed in the nuances of sale leaseback transactions and can guide you through the process from start to finish. Whether you need help evaluating the potential benefits for your business or managing the transaction, we are here to help.
Don’t let your valuable real estate assets sit idle. Contact Street CRE today to schedule a consultation with our experienced team. We’ll help you explore the benefits of a sale leaseback and develop a strategy to maximize your property’s value.
Navigating the dynamic landscape of Reno's commercial real estate market demands not just a keen eye but the guidance of a seasoned professional. In this ever-changing environment, the right agent becomes indispensable to achieving your investment goals. Their expertise is not merely a convenience; it is a necessity for anyone looking to make informed, strategic decisions in real estate investment. This discussion delves into the critical components that underscore the importance of selecting a knowledgeable and experienced commercial real estate agent in Reno.
The value of experience in the commercial real estate sector cannot be overstated. Seasoned agents bring to the table an intuitive grasp of market dynamics, a deep understanding of property values, and an eye for burgeoning growth areas within Reno. This wealth of experience affords agents the foresight necessary to provide sound advice on long-term investments and to pinpoint opportunities that resonate with the client's vision. Their seasoned judgment is pivotal in navigating the complexities of the market, ensuring that investments not only meet current needs but also anticipate future trends and developments.
A comprehensive understanding of the Reno commercial real estate market is fundamental to any successful investment. An agent who possesses an in-depth knowledge of current listings, is well-versed in zoning laws, and has insights into future development plans, stands out as an invaluable resource. This extensive market knowledge is crucial for making informed decisions that could significantly impact the profitability and success of an investment. The ability to adeptly navigate these various elements can mean the difference between a good investment and a great one.
The importance of exceptional negotiation skills in commercial real estate cannot be understated. The right agent doesn't merely close deals; they secure terms that advance their clients' specific financial and strategic objectives. While specific examples remain confidential, countless stories underline how adept negotiation has led to terms markedly favorable to the client. This skill set is vital in ensuring that every transaction not only meets but exceeds the client's expectations, aligning perfectly with their investment strategy.
The hallmark of an outstanding commercial real estate agent is their commitment to truly understanding their client's unique business needs and investment criteria. This personalized approach ensures that the agent is not just matching properties to a checklist but aligning investments with the client's overarching business strategy. It's about creating a tailored experience that resonates with the client's vision, ensuring that every recommendation and decision made is in perfect harmony with their goals and aspirations.
Choosing the right commercial real estate agent in Reno is a decision that should not be taken lightly. The factors discussed — from market experience and comprehensive knowledge to negotiation prowess and a deep understanding of the client's specific needs — all play pivotal roles in ensuring successful transactions and long-term satisfaction. As you navigate the complexities of the Reno commercial real estate market, consider these critical elements. They underscore the immense value a skilled, experienced agent brings to the table, not just in closing deals but in crafting investments that stand the test of time.
In the vast landscapes of Northern Nevada, finding the right tenant for your rental property can be as challenging as finding a needle in a haystack. The real estate landscape, while full of potential, requires a sophisticated touch and a depth of local market knowledge. Enter Street Commercial Real Estate (Street CRE), a real estate game-changer in the region.
What sets Street CRE apart in the crowded world of real estate? The answer lies in the unparalleled core competency of each Street Broker. These experts possess an unmatched ability to provide clients and partners with strategic market intelligence and relevant deal information. For landlords, this means making calculated decisions that not only save time but also protect valuable resources.
Street CRE’s Leasing and Disposition Services redefine the way properties are put on the market. At the heart of their offerings is the Complimentary CMA (Comparative Market Analysis) - a critical tool that offers insights into current values, suggests listing price ranges, and crafts a strategic plan for disposition or leasing.
Furthermore, they understand the power of first impressions. Professional interior and exterior photographs, including drone and panoramic views, are strategically placed on top commercial real estate internet sites, maximizing visibility.
If that isn’t enough, potential buyers and tenants are presented with an attractive and informative offering memorandum. This comprehensive guide provides a deep dive into the property's details, from income and expenses to tax information. All this information is designed to inform and attract potential tenants.
Behind the success of Street CRE are the visionary Harris brothers, Matthew and Benjamin. Recognizing a gap in the Northern Nevada commercial real estate market, they introduced a unique blend of national firm's technological efficiency with the personalized communication typically found in a principal-led platform.
Their years of experience in commercial real estate, combined with an extensive network, have birthed a diverse team of Street Brokers who are always on the lookout for opportunities that benefit their clients.
Street CRE isn't just a brokerage firm; it's a team of expert real estate advisors who prioritize your success. Whether you're eyeing the industrial, office space, retail, or multi-family real estate markets, Street CRE has a Street Broker ready to assist.
Leveraging a comprehensive online database and communication system, these brokers can match clients with an expansive international network of buyers, sellers, and occupiers. The result? Increased visibility for properties and a more efficient transaction process.
Choosing Street CRE isn't just about finding tenants for your property; it's about ensuring you have the best representation in the market. With a commitment to expertise, dedication, and leveraging modern technologies, Street CRE offers a superior alternative to traditional commercial listing methods.
In conclusion, if you're a landlord in Northern Nevada, your search for the perfect tenant doesn't have to be daunting. With Street Commercial Real Estate, you have a partner that offers sophistication, market expertise, and a commitment to your success.
Disclaimer: The content provided in this blog post is for informational purposes only and does not constitute as professional real estate advice or endorsement of specific services.
