Buyer of East Reno Project Targets Increased Occupancy

Bob Anderson loves properties with lots of tenants - properties such as the Magnolia Commerce Center his company just bought in Reno.

And the upside in the acquisition, he says, begins with increasing the number of companies that call the center home.

Anderson, the chief executive officer for Birtcher Anderson Realty LLC of San Juan Capistrano, said his investment company had been scouting the Reno-area market for five years before it settled on the 129,767-square-foot center at Mill Street and East McCarran.

Birtcher Anderson Realty said last week it paid $19.1 million for the five-building property. It was sold by Reno's DP Partners.

Anderson said the company's strategy for increasing the property's value includes:

• Getting the center, currently 30 percent vacant, leased up with an aggressive marketing effort that includes a new name. Tenants currently include Cricket Nevada, IKON Office Solutions, Omnitron International Inc. and Spherion Staffing.
• Finishing some of the vacant space, which currently is nothing more than a shell, into space that could handle a company that needs to move in quickly. If nothing else, he said, the finished space would help potential tenants envision the possibilities for their own company.
• Using the company's background with multi-tenant properties, tighten management of operating expenses to reduce tenants' costs.

The company has some protection from competitors, he noted, because nearby vacant land has been purchased for open space and watershed protection. Magnolia Commerce Center was built between 2000 and 2003.

Birtcher Anderson's strategy with multi-tenant projects, meanwhile, is straightforward: Unlike office buildings with one big tenant, a multi-user property can lose a tenant or two without threatening the entire project.

"It's a recession-resistant approach to commercial real estate,"Anderson said.

The purchase was put together by Bill Palmer and John Sedar of the Palmer Team in Sacramento, and Anderson said his company hopes to make further acquisitions in northern Nevada.

Along with industrial-flex projects such as Magnolia Commerce Center - Anderson prefers to call them "office service" properties - Birtcher Anderson Realty buys specialty retail centers as well as office projects.

The vacancy rate in airport-area properties is running about 18 percent, but Anderson said his company believes continued strong demand for industrial spaces and a lack of new supply could push vacancies down to 10 percent by the end of the year.

By: Northern Nevada Business Weekly. www.nnbw.biz

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