Renovation planned by buyers of industrial complex
July 22, 2013
Two Reno-based real estate investment firms have plans to restore an aging industrial complex off Coney Island Drive in Sparks.
Schnabel Ventures and Blackfire Real Estate Investors recently closed on a $3.35 million purchase of the 115,000-square-foot Truckee Meadows Business Park, a class B property consisting of 11 freestanding buildings. Vacancy at the site is slighty higher than 50 percent, says Tilio Lagatta, managing member of Blackfire Real Estate Investors.
Blackfire and Schnabel Ventures purchased the property from a family trust. Lagatta says the purchase was appealing on many different levels.
"The property had been undercapitalized and undermanaged for a significant amount of time, and therein lied the opportunity to increase occupancy and the look and feel and perception of the property within the brokerage community. That led us to believe it was a smart, value-add play, and that is what Blackfire specializes in."
The largest building at Truckee Meadows Business Park is just over 11,400 square feet. Several of the buildings have multiple tenants. Blackfire and Schnabel Ventures founder Michael Schnabel plan on a host of cosmetic upgrades for the park, including:
Painting each building
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Upgrading the landscaping
Repairing and repaving asphalt driveways
Installing new signage
The partners also will look for ways to reduce common-area maintenance costs, such as installing additional xeriscaping. They also will put in place a design package for interior tenant improvements to help lure prospective tenants to vacant spaces.
The goal of creating a premier business park in an older part of the industrial corridor in Sparks that's adjacent to the Truckee River doesn't come without its challenges, Lagatta acknowledges. Rents might be set slightly lower than market rates for comparable properties so new tenants can offset the cost of purchasing flood insurance.
Also, Lagatta notes, since the last big flood in 2006, work has been done to improve the levees and storm drains in the area.
"The project as it stands today is less susceptible to flooding than in was in 2006 — that being said, there still will be some people who won't look at the project because of that."
Blackfire and Schnabel Ventures plan on a multi-prong approach of leasing or selling individual units to new tenants. Dan Buhrmann of CBRE's industrial team represented the seller, Truckee Meadows Business Park LLC, while Chris Shanks of NAI Alliance represented the buyers in the transaction.