Center sale demonstrates demand

Last week's sale of Reno's Airport Square Shopping Center demonstrates the healthy market for investment properties in northern Nevada.

When WDCI Inc., a subsidiary of Hawaii's Alexander & Baldwin Inc., sold the shopping center for $23.5 million, it pocketed a pre-tax profit of approximately $6.6 million on a property it had owned since 1995.

Eureka Development Co.

purchased the 170,800-square-foot center on 18 acres on Plumb Lane just west of U.S.

395.

Costco, which owns its own site, is the anchor tenant of the center.

Other major tenants include Office Depot, PetsMart and Mor Furniture.

Allen Doane, president and chief executive officer of Alexander & Baldwin, said the price his company received for the center reflects its work to make the center attractive to a buyer.

Airport Square is 98 percent leased, he said, and Alexander & Baldwin worked closely with CostCo to help the company secure land that allowed expansion of the store and addition of a gas station.

He said, too, the sale comes at a time when interest rates are at a historical low and demand for incomeproducing assets is high.

Kelly Bland, a retail specialist with Colliers International in Reno, said demand for quality retail properties in northern Nevada is strong.

He said much of the demand is driven by so-called "1031 exchanges" in which owners of investment property can exchange them for other properties without facing taxation on the capital gain.

Another specialist in retail properties, Chris Waizmann of Trammell Crow, said demand for Reno-area shopping centers is strong, too, because the inventory of centers isn't large and the few that come on the market tend to draw strong bids.

"Demand, especially for anchored shopping centers, is very strong," he said.

Despite the sale of Airport Square, Alexander & Baldwin remains bullish on northern Nevada.

Norbert M.

Buelsing, executive vice president of A&B Properties, the real estate arm of Alexander & Baldwin, said the sale of the shopping center reflected a business opportunity on a specific property rather than the result of any concern about the future of the market.

In fact,WDCI, the Alexander & Baldwin subsidiary that owned the shopping center, late last year invested $20 million in the region with its purchase of the Sparks Business Center, a 396,080- square-foot property on 20.7 acres near the corner of Prater Way and Sparks Boulevard.