Posted by: J. Michael Hoeck, SIOR
Companies are looking more in depth at what a region has to offer. Other factors now being considered include benefits, transportation, housing, health care, personal & income taxes, climate, crime, recreation, arts and entertainment, cost of living and education.
Recently a prospect for a medium sized (100,000 +/- sf) processing/distribution center with 25-50 employees requested a comparison between Reno and ten other cities: Boise, Seattle, Portland, Salt Lake, Phoenix, Las Vegas, San Diego, Ontario (CA), Fresno and Sacramento. The study was prepared in conjunction with EDAWN and SSPC and here are the results...
When facility costs are considered, Reno ranks right at the top with an average asking rate of $0.33/sf NNN. Only Fresno has an average lower rate ($0.29/sf NNN) and as far as the quantity of offerings, Reno ranks fourth behind the much larger markets of Phoenix, San Diego and Ontario. This bodes well for prospects looking for a competitive rate.
Reno ranks first with respect to state taxes, tied with Las Vegas. Employment taxes are in the middle of the pack with Phoenix, Portland, Boise and Seattle all slightly lower yet our rates are nearly 45% lower than California. We don’t fare as well with property tax rates, ours are some of the highest with only Boise and Phoenix being higher. Only Idaho, Utah and Arizona join Nevada as right to work states.
Utility costs pose a sore spot for our region with electricity (8th) and natural gas (last) in the rankings. Only Southern California had higher electricity rates and when water and sewer are included, Reno has the highest overall costs with Fresno a distant second. Often we cite the other lower operating costs offset this disadvantage.
A positive factor in the comparison is labor. We rank favorably in wage rates behind only Boise, Fresno, and Phoenix. When factoring in fringe benefit costs, we rise to the top 3 passing Fresno. Our unemployment rate hovers near 4.2% and all of the cities were similar except Fresno 8.2% and Boise 1.7%. Jason Quintel of Panattoni Development in Phoenix cited a large labor pool, low wages and a secondary education feeder system as Phoenix’s strengths when costs are compared. Combined with a strategic location to California, Phoenix is a formidable competitor.
Transportation is becoming an increasingly important factor. Reno has the lowest number of trucking carriers (79) but is fortunate to have as good or better rail service than the competition. Boise and Las Vegas have the weakest rail service (1 provider) and Portland and Seattle each have three rail providers. Reno’s proximity to seaports is the closest of any inland city except Ontario. Increasing fuel costs are becoming more important when considering proximity to Long Beach/Los Angeles seaports, combined the nation’s largest. Air cargo ranking is significant when correlated to our city’s size and could become an untapped market for us to pursue.
While Reno clearly has the lowest housing rental rates in the study, we also have some of the most expensive home prices with only San Diego, Seattle, Ontario and Sacramento being higher. We rank #2 in per capita income (Seattle #1) Our sales tax rates are amongst the lowest (#4 with Portland, Boise and Salt Lake lower) and we rank best along with Las Vegas for (lack of) personal and income taxes. Overall cost of living ranking is in the upper middle ranks with Boise, Phoenix, Salt Lake City and Las Vegas being lower.
Crime rate statistics are relatively low with only Salt Lake, Boise, San Diego and Portland beating Reno. Our commute time is the shortest of all of the cities. Health care costs for individuals is in the lowest three (behind San Diego and Boise), we have the highest hospital bed count per capita and rank #2 in doctors per capita.
Recreational rankings are more of a personal taste but when considering golf, lakes and dining, Reno would tie for fourth along with Portland and San Diego and being topped by only the much larger cities of Phoenix, Las Vegas and Seattle. In arts and culture we rank in the lower percentile, but ahead of similarly sized Boise, Ontario, Fresno and Sacramento. When all of the above quality of life factors are considered we rate consistently high.
Excepting Las Vegas and Central California, Reno has the lowest percentage of high school and college graduates. When comparing elementary and secondary education levels, we rank second lowest in expenditure per pupil (Boise lowest) and have the second lowest graduation rate ahead of only Phoenix. These factors could cause concern for prospective companies.
There you have it. With several new large facilities available, northern Nevada is poised to compete with the best of the west’s cities. If you were able to select where to locate a facility (and possibly your family), northern Nevada ranks quite high and confirms what all of us Northern Nevadans have known for some time. When stacked up against the competition, not only are we strategically located to serve the eleven western states, but we offer a lower cost of living, low occupancy costs, great tax incentives, abundant recreation and an affordable labor force. We need to ensure we summarize and accentuate the positives that make northern Nevada special.
Industrial Specialist
775 336 4621
Mike began specializing in industrial brokerage with Colliers International in 1999, and in May 2005, joined Alliance Commercial as a Partner and as Vice President of its Industrial Properties Group. In May of 2007 Alliance Commercial became NAI Alliance and Mr. Hoeck became a Senior Vice President.
We’ve all heard, “If it didn’t always rain in Seattle everyone would live there.” or “San Diego is the most livable city.” When a company analyzes where to locate a distribution or manufacturing facility there are many more factors to consider other than the usual rents, taxes, utilities and labor.
We’ve all heard, “If it didn’t always rain in Seattle everyone would live there.” or “San Diego is the most livable city.” When a company analyzes where to locate a distribution or manufacturing facility there are many more factors to consider other than the usual rents, taxes, utilities and labor.
Companies are looking more in depth at what a region has to offer. Other factors now being considered include benefits, transportation, housing, health care, personal & income taxes, climate, crime, recreation, arts and entertainment, cost of living and education.
Recently a prospect for a medium sized (100,000 +/- sf) processing/distribution center with 25-50 employees requested a comparison between Reno and ten other cities: Boise, Seattle, Portland, Salt Lake, Phoenix, Las Vegas, San Diego, Ontario (CA), Fresno and Sacramento. The study was prepared in conjunction with EDAWN and SSPC and here are the results...
When facility costs are considered, Reno ranks right at the top with an average asking rate of $0.33/sf NNN. Only Fresno has an average lower rate ($0.29/sf NNN) and as far as the quantity of offerings, Reno ranks fourth behind the much larger markets of Phoenix, San Diego and Ontario. This bodes well for prospects looking for a competitive rate.
Reno ranks first with respect to state taxes, tied with Las Vegas. Employment taxes are in the middle of the pack with Phoenix, Portland, Boise and Seattle all slightly lower yet our rates are nearly 45% lower than California. We don’t fare as well with property tax rates, ours are some of the highest with only Boise and Phoenix being higher. Only Idaho, Utah and Arizona join Nevada as right to work states.
Utility costs pose a sore spot for our region with electricity (8th) and natural gas (last) in the rankings. Only Southern California had higher electricity rates and when water and sewer are included, Reno has the highest overall costs with Fresno a distant second. Often we cite the other lower operating costs offset this disadvantage.
A positive factor in the comparison is labor. We rank favorably in wage rates behind only Boise, Fresno, and Phoenix. When factoring in fringe benefit costs, we rise to the top 3 passing Fresno. Our unemployment rate hovers near 4.2% and all of the cities were similar except Fresno 8.2% and Boise 1.7%. Jason Quintel of Panattoni Development in Phoenix cited a large labor pool, low wages and a secondary education feeder system as Phoenix’s strengths when costs are compared. Combined with a strategic location to California, Phoenix is a formidable competitor.
Transportation is becoming an increasingly important factor. Reno has the lowest number of trucking carriers (79) but is fortunate to have as good or better rail service than the competition. Boise and Las Vegas have the weakest rail service (1 provider) and Portland and Seattle each have three rail providers. Reno’s proximity to seaports is the closest of any inland city except Ontario. Increasing fuel costs are becoming more important when considering proximity to Long Beach/Los Angeles seaports, combined the nation’s largest. Air cargo ranking is significant when correlated to our city’s size and could become an untapped market for us to pursue.
While Reno clearly has the lowest housing rental rates in the study, we also have some of the most expensive home prices with only San Diego, Seattle, Ontario and Sacramento being higher. We rank #2 in per capita income (Seattle #1) Our sales tax rates are amongst the lowest (#4 with Portland, Boise and Salt Lake lower) and we rank best along with Las Vegas for (lack of) personal and income taxes. Overall cost of living ranking is in the upper middle ranks with Boise, Phoenix, Salt Lake City and Las Vegas being lower.
Crime rate statistics are relatively low with only Salt Lake, Boise, San Diego and Portland beating Reno. Our commute time is the shortest of all of the cities. Health care costs for individuals is in the lowest three (behind San Diego and Boise), we have the highest hospital bed count per capita and rank #2 in doctors per capita.
Recreational rankings are more of a personal taste but when considering golf, lakes and dining, Reno would tie for fourth along with Portland and San Diego and being topped by only the much larger cities of Phoenix, Las Vegas and Seattle. In arts and culture we rank in the lower percentile, but ahead of similarly sized Boise, Ontario, Fresno and Sacramento. When all of the above quality of life factors are considered we rate consistently high.
Excepting Las Vegas and Central California, Reno has the lowest percentage of high school and college graduates. When comparing elementary and secondary education levels, we rank second lowest in expenditure per pupil (Boise lowest) and have the second lowest graduation rate ahead of only Phoenix. These factors could cause concern for prospective companies.
There you have it. With several new large facilities available, northern Nevada is poised to compete with the best of the west’s cities. If you were able to select where to locate a facility (and possibly your family), northern Nevada ranks quite high and confirms what all of us Northern Nevadans have known for some time. When stacked up against the competition, not only are we strategically located to serve the eleven western states, but we offer a lower cost of living, low occupancy costs, great tax incentives, abundant recreation and an affordable labor force. We need to ensure we summarize and accentuate the positives that make northern Nevada special.
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