Rent Is Only Part of the Cost of an Industrial Location
When companies compare industrial buildings, the conversation usually begins with rent, square footage and building specifications.
Those numbers matter, but they do not tell the whole story.
For a distribution, manufacturing or e-commerce operation, the cost of an industrial address extends well beyond the lease rate. A building that saves a few cents per square foot may create higher transportation costs, longer employee commutes, missed carrier cutoffs or less predictable access to customers and suppliers.
Those costs are harder to identify on a property flyer, but they can have a much larger effect on the operation.
This is especially important as Northern Nevada prepares for a major expansion of Interstate 80 between Vista Boulevard and USA Parkway.
The project is needed. It is intended to improve safety, increase capacity and create more reliable travel through a corridor that has experienced substantial growth.
It will also require several years of construction along the primary route connecting Reno and Sparks to the Tahoe-Reno Industrial Center.
Before signing a lease, purchasing a building or selecting a third-party logistics provider, businesses should understand how the location will affect their daily operations during construction and over the full term of their commitment.
What Is Planned for I-80?
The Nevada Department of Transportation plans to widen I-80 between Vista Boulevard and the USA Parkway interchange.
The preferred plan would create three travel lanes in each direction, widen the shoulders and improve the Lockwood, Mustang and Patrick interchanges.
Current planning anticipates that construction could begin in 2027 and continue for more than five years. As with any large public infrastructure project, the exact schedule and construction phases may change.
The project is responding to substantial growth along the corridor. Traffic has increased significantly over the past decade, with tens of thousands of vehicles now traveling this section of interstate each day.
Once completed, the improvements should increase capacity and support safer, more reliable travel. During construction, however, businesses should prepare for lane shifts, temporary closures, changing traffic patterns and less predictable drive times.
I-80 Is a Business Route
Much of the public discussion about the project focuses on employees commuting to and from TRIC.
Workforce access is an important concern, but I-80 is more than a commute route.
It connects industrial facilities at TRIC with Reno, Sparks, regional carrier terminals, Reno-Tahoe International Airport, vendors, service providers and a large portion of the area’s workforce.
For many companies, the corridor is part of the daily route used by:
Employees
Vendors and service technicians
Inbound suppliers
Parcel carriers
Less-than-truckload carriers
Outbound freight
Management and support teams
I-80 is currently the only direct connection between east Sparks and TRIC. When a crash, weather event or other incident interrupts traffic, there is no comparable direct alternate route between the two areas.
That lack of redundancy should be considered before a company commits to a location.
The Lowest Rent May Not Produce the Lowest Operating Cost
Industrial real estate decisions are often compared using rent per square foot.
That makes sense. Rent is easy to calculate, clearly stated in the lease and directly affects occupancy costs.
Operational disruption is much harder to quantify.
Consider a company with 100 employees. If unpredictable congestion adds even 20 minutes to each person’s daily commute, the company may not pay directly for those additional minutes. It may still experience the cost through recruitment challenges, employee turnover, attendance problems and difficulty covering shift changes.
A distribution operation may face a different type of exposure.
A late inbound trailer can delay receiving. A delayed outbound truck may miss a linehaul connection. An employee arriving late may leave a picking, packing or loading position uncovered at the beginning of a shift.
For an e-commerce operation, carrier schedules can be especially important. A building may be physically closer to California, but that advantage means less if recurring roadway delays interfere with the final pickup of the day or prevent orders from entering the carrier network on time.
The full cost of an industrial location may include:
Employee recruitment and retention
Travel-time variability
Missed or compressed carrier pickup windows
Overtime caused by delayed inbound freight
Fuel and transportation costs
Vendor response times
Service and maintenance delays
Limited alternate routes during traffic incidents
Management time spent responding to transportation problems
None of these factors automatically makes a building unsuitable. They should simply be evaluated alongside rent, operating expenses and building specifications.
TRIC Still Works for Many Industrial Users
TRIC remains a strong location for many companies.
It offers large sites, modern industrial buildings and infrastructure that can be difficult to replicate within the more developed portions of Reno and Sparks. The area supports major manufacturers, technology companies, distribution operations and businesses that require substantial land, power or future expansion capacity.
For some companies, those advantages will outweigh the transportation concerns.
A manufacturer moving fewer, larger shipments may be less affected by daily parcel-carrier deadlines. A company drawing employees from Fernley, Silver Springs or communities east of Reno may evaluate workforce access differently.
An operation requiring a large secured yard, significant power or a highly specialized facility may also have few comparable alternatives closer to the urban core.
Companies already operating successfully at TRIC may understand the corridor well and have transportation plans in place.
The issue is not whether TRIC is a good or bad location.
The question is whether it is the right location for a specific operation.
Which Businesses Should Examine the Corridor More Closely?
The upcoming construction deserves particular attention from businesses with:
Strict same-day shipping requirements
Seller-fulfilled or other time-sensitive e-commerce orders
Multiple daily carrier pickups
A workforce concentrated in Reno or Sparks
Shift schedules that overlap with peak commute periods
Frequent inbound deliveries from suppliers west of TRIC
Service technicians or vendors based in Reno and Sparks
Little flexibility when an employee, truck or delivery arrives late
Customer commitments tied to specific outbound cutoff times
For these businesses, access and travel reliability may deserve as much consideration as clear height, dock count, power or rental rate.
That does not mean the corridor should automatically be ruled out. It means the location should be tested under realistic operating conditions before a long-term commitment is made.
Selecting a 3PL Requires the Same Analysis
Location should also be part of the evaluation when a company selects a third-party logistics provider.
A 3PL may offer competitive pricing, experienced management and excellent warehouse capabilities. Its address will still affect the client’s operation.
Businesses should understand how a proposed 3PL facility connects to parcel hubs, freight terminals, suppliers and the available labor pool.
Questions to ask include:
Where are the primary parcel and less-than-truckload carrier terminals?
What are the provider’s actual daily carrier pickup times?
How much time is built in between the final order cutoff and carrier departure?
What happens when traffic delays an inbound or outbound trailer?
Does the provider have alternative carrier arrangements when needed?
Where does the warehouse workforce live?
How has the provider handled previous I-80 closures or extended delays?
Does the proposal account for transportation changes during construction?
Would another location improve access without materially increasing fulfillment costs?
The warehouse may belong to the 3PL, but missed service commitments will still affect the client.
Evaluate the Route During the Hours That Matter
A building tour at 10:00 a.m. does not show how the location performs during a 6:00 a.m. shift change or a late-afternoon carrier pickup.
Before selecting a property, businesses should drive the route during the times that matter to their operation.
That may include:
The beginning and end of each shift
The final outbound pickup window
Peak employee commute periods
Times when inbound suppliers normally arrive
Winter driving conditions
Periods affected by crashes, roadwork or closures
Companies should also map where their current employees live.
A building may appear centrally located on a regional map while adding substantial travel time for most of the workforce. For labor-intensive operations, that information may be just as important as the building specifications.
The evaluation should also consider where carriers, customers, vendors and service providers are located. A property may work well for employees but create unnecessary complications for freight or service access.
Future Transportation Projects Should Not Be Assumed
Northern Nevada is studying additional transportation options for the TRIC corridor, including a potential Northeast Connector and commuter rail service.
Those projects may eventually create more reliable access and provide alternatives to I-80.
They should not be treated as guaranteed solutions when evaluating a property today.
The Northeast Connector remains in the feasibility stage. Environmental review, design, funding and construction timing have not been finalized.
Commuter rail service between Reno and TRIC has also been studied. While the concept could help support employee transportation, funding and implementation remain unresolved.
A company making a location decision today should not assume either alternative will be operating during its lease term unless a funded project and confirmed schedule are in place.
Site selection should be based primarily on the transportation network that exists and the infrastructure projects that are actually committed.
My Advice to Northern Nevada Industrial Users
For businesses with strict carrier deadlines, significant labor requirements or frequent operational ties to Reno and Sparks, I recommend carefully comparing properties west of the planned I-80 construction corridor before making a commitment.
That is not a recommendation to automatically reject TRIC.
It is a recommendation to calculate the full cost of each address.
A modern building at a competitive rental rate may still be the right answer. The decision should also account for transportation reliability, workforce access, carrier schedules and the company’s ability to absorb delays.
The best industrial building is not always the one with the lowest rent, newest construction or most dock doors.
It is the building that allows the business to operate reliably.
Before You Commit to a Northern Nevada Location
Industrial site selection requires more than searching available listings.
The building, workforce, transportation network and daily operation must be evaluated together. This is particularly important when a company is entering Northern Nevada from another market and does not yet understand how the region’s industrial submarkets function.
Before signing a lease, purchasing a building or selecting a 3PL, make sure the address supports the way your company actually moves people and products.
Miller Industrial Properties represents industrial tenants and buyers throughout Reno, Sparks and Northern Nevada. To discuss an upcoming requirement or compare Northern Nevada locations, contact Beki Dobson, SIOR.
