Fernley back in focus for distribution and manufacturing

Companies looking for industrial space in Northern Nevada increasingly are looking at sites in Fernley.

But despite appearances, the Amazon.com distribution facility isn’t among them.

Feathers were flying late last week when the 588,560-square-foot building occupied by an Amazon.com distribution center was listed for lease on a commercial real estate Web site.

But experts in industrial real estate said that the listing appears to represent an effort by the owner of the building to generate interest from potential replacement tenants as Amazon nears the end of its lease and hasn’t yet decided to renew.

Amazon representatives didn’t return calls seeking explanation, and the ad that listed the building’s availability came as a surprise to economic development experts and government officials.

But Fernley is clearly on the radar for other industrial companies and developers.

The Crossroads Industrial Center, about 3,000 acres of rail-served industrial property on the north side of Fernley, is drawing interest for some potential big projects, says Brian Armon, managing partner at Cushman & Wakefield|Commerce, which represents the property’s owners.

He says the groups visiting the location include developers who have build-to-suit proposals in hand as well as developers who think the market is ready for purely speculative projects.

As top-quality industrial spaces become more difficult to find in Reno, Sparks and the Tahoe Reno Industrial Center, rents are rising across the region.

And that’s breathing fresh life into industrial proposals in Fernley, says Mike Nevis, a principal in the industrial group of NAI Alliance.

“We’re getting close to the point where spec buildings are feasible,” he said. “Another 10 percent increase in lease or purchase costs will do it.”

Nevis says he expects activity in the Fernley area to pick up in the third and fourth quarters of this year after a relatively quiet first three months.

But demand will bump into a hard reality.

Only one large building, the 180,000-square-foot property previously occupied by A.R.E., is available.

“If you’re going to Fernley, you’ll have to build,” Nevis says.

While the city 32 miles east of Reno is farther distant than the Tahoe Reno Industrial Center, its major competition for major new projects, development costs in Fernley often are lower, Nevis says.

“Tahoe Reno Industrial Center has hills and lots of rocks, which have to be dealt with by a developer,” the NAI broker says.

Fernley’s appeal to potential manufacturers is strengthened, too, by the presence of other companies that have help draw a skilled workforce.

Those manufacturers range from Sherwin Williams and decking-maker Trex to commercial printer Quebecor World and Agru America, a plastics manufacturer.

Fernley is also home to major distribution centers that include Amazon.com, UPS Logistics, and MSC Industrial Supply.

Whether they are manufacturers or distributors, potential employers like the availability of a nearby workforce as they scout locations in Fernley, Nevis says.

To help draw new employers, Lyon County has created a fast-track process to approve applications for industrial projects.

The unemployment rate in Lyon County is about 12.6 percent, the highest in the state, the Nevada Department of Employment, Training and Rehabilitation estimated last week.

Helping to draw developers’ attention to Fernley is its transportation infrastructure. The Union Pacific’s main line comes through town and is served by I-80 as well as U.S. 95.