Office tower draws interest from investors across nation
Investors around the country snapped to attention about 10 days ago as a major office property in downtown Reno came on the market for $19 million.
The 15-story Truckee River Office tower at 300 E.
2nd St. a building constructed in 1981 as a headquarters for Harrah’s currently is owned by Triple Net Properties of Santa Ana, Calif.
It’s marketed by Todd Blonsley of the Reno office of Marcus & Millichap.
“Within 24 hours, I had four inquiries from Chicago, Los Angeles and San Francisco,” Blonsley said.
The reason? With a $19 million price tag, the property has a capitalization rate of more than 10 percent.
And because the building currently stands about 29 percent vacant, buyers can boost their return dramatically with aggressive leasing, Blonsley said.
The building contains nearly 150,000 square feet of office space on its ground floor and its upper four floors.
The rest of the structure is devoted to a parking garage.
Along with its eye-catching potential return, the property carries some risks.
“It’s on the other side of the track for office users,” Blonsley acknowledges.
Most of the Class A office space in the downtown area is either in the Virginia Street corridor or farther west.
The Truckee River Office Tower, on the other hand, is at the east edge of downtown.
A second risk: “Five years down the road there’s a potential Harrah’s renews for less office square footage than it currently leases,” says Blonsley.
“But at the same time, I cannot imagine Harrah’s will ever have less of a need for employee and guest parking.
Thus their need to secure a long-term parking garage lease appears to be a solid assumption.”
Along with Harrah’s, office tenants include Washoe County, the state government, the U.S.
General Services Administration,NextMedia Group,Americom Broadcasting and The Call Center.
The Truckee River Office Tower comes onto the market just weeks after the $20 million sale of the office building at 100 W.
Liberty St. the old Porsche building.
That building includes about 150,000 square feet of office space along with a 100,000-square-foot parking garage.
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