Foot Locker Opens Reno-Area Distribution Center

Foot Locker Distribution Center. Image courtesy of ARCO

Foot Locker Inc. has expanded its U.S. presence with the opening of a distribution center in metropolitan Reno, Nev. Scannell Properties developed the manufacturer’s new facility, which spans 465,000 square feet in Spanish Springs, Nev., at a cost of $40 million.

Foot Locker’s new distribution center carries an address on Isidor Court within the Spanish Springs Business Center, a 511-acre, master-planned park located roughly 15 miles from downtown Reno, in the burgeoning Pyramid Highway Corridor. The manufacturer settled on the Reno area for what is its second-largest distribution center in the U.S. after considering sites in California, Arizona and Utah.

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“The potential for the receipt of economic incentives… have played a material factor in the Company’s decision making. Additionally, pertinent factors are inclusive of availability of qualified workforce, real estate costs, transportation costs, labor costs, transportation infrastructure and business permitting and regulatory structure,” Todd Greener, senior vice president with Foot Locker Inc., wrote in an April 6, 2021, letter to Nevada’s Office of Economic Development.

The State of Nevada granted Foot Locker $2.7 million in tax abatements over a 10-year period. In exchange, the company will create approximately 200 full-time jobs at the distribution center over the next five years. The firm is in town for the long haul, having inked a 10-year lease agreement with Scannell for the newly developed facility on Isidor Court.

Desert novelty

Featuring tilt-up construction, the automated distribution facility is a cutting-edge operation, offering a ceiling-suspended conveyor system; 83,000-square-foot, three-level pick module, 140,000 square feet of super-flat floor slab for VNA racking; and a rigid insulation roof system with 144 skylights. The building also features a 36-foot clear height and 23 dock positions with telescoping conveyors.

Additionally, Foot Locker ensured that the high-tech facility would reflect its corporate commitment to ESG. The result is a distribution center that incorporates a host of sustainable features including, recycled materials, reflective ceilings, LED lighting and reclaimed water. ARCO, the general contractor on the project, spearheaded the design-build services and completed the facility on an eight-month turnaround.

Little choice

Beyond pursuing a build-to-suit, Foot Locker had very few options for big-box accommodations—or space of any size, for that matter—in metropolitan Reno. “Activity is still at an all-time high, rates have soared to historical heights and new construction is nearly 100 percent preleased by the time the building delivers,” according to a third quarter 2022 report by Kidder Mathews. Furthermore, the Reno industrial market’s direct vacancy rate did not break the 1 percent mark for the second consecutive quarter.

Developers continue to build in an effort to fill the void in space for hungry users, but they can barely keep pace, even with a pipeline of speculative construction totaling 6 million square feet due for delivery over the next 18 to 24 months. As noted in the Kidder Mathews report, “If activity remains even close to as high as it has been in the recent quarters though, most, or all, of this product will be leased well before the delivery of the building, leaving an already constrained market with very little inventory.”