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  • Writer's pictureTom Miller, CCIM

A Look at the Tesla Effect in Northern Nevada


Here in the fall of 2016, the first phase in Tesla’s gigafactory is largely in place as significant interior work goes on. Quite a number of employees are on site working now and new phases of hiring and construction work is on-going. Much has been written about the Tesla effect and its impact on northern Nevada. But now, more than two years since the announcement of Tesla’s decision to build in Nevada, how is this ‘Tesla Effect’ actually panning out?

We can certainly point to some immediate Tesla/Panasonic suppliers that have moved into Nevada. While not many and moderately sized, nonetheless, some firms serving the Tesla facility have been attracted to Nevada. Surely, more will come as the facility develops and grows toward scaling up production. There is also the matter of relocating employees, people who have followed Tesla into the region to at the factory. This aspect as well will only see additional growth. So the quick answer is that, yes, the ‘Tesla Effect’ is happening and will no doubt continue to grow.

However, I’d like to point out another impact that I deal with frequently. Increasingly, I have been hearing commercial real estate investors looking very hard to placing their investment dollars into the northern Nevada market. Many times, it’s due to the awareness that if Tesla chooses Nevada, there had to be lots good reasons why and they want to be a part of it.

There is increased demand to purchase commercial real estate assets in northern Nevada. That cannot be 100% attributed to Tesla,of course, since the industrial real estate economy creates its own market momentum due to our excellent logistical location and demand for distributors to serve the 11 western states from Reno. But it is significant to note that the topic of Tesla always seems to come up with investors. The fact that Tesla is here is on their minds. It adds to their comfort level when they’re considering investing their resources in our area.

While Tesla’s impact is quantifiable in so far as the current employee count, the number of firms moved here to support the factory, the construction spending to date, the “economic multiplier,” etc., to limit the impact Nevada is receiving to those categories would be a miscalculation. And while it may be far more challenging and debatable to try to validate the more vague indirect impact Tesla’s presence has, I can say without hesitation that I hear it every week when speaking to out of state investors and relocating companies. Make no mistake that Tesla’s presence has significantly helped northern Nevada’s continuing economic growth and will help push and expand our economy in ways we may not immediately realize today. Just give it time.

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Miller Industrial Properties, Sparks, Reno, Nevada
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