Four-building Magnolia portfolio sold

Four south Reno office buildings developed by Magnolia Development Co. have been sold in a $23 million transaction.

The South Meadows buildings, which total approximately 100,000 square feet of leasable space, were purchased by Flocchini-Magnolia Properties LLC, a Reno-based investment company.

Also included in the transaction is more than two acres of vacant land that possibly could developed into three more office buildings.

The companies that owned the buildings have been involved in a reorganization under Chapter 11 of the federal bankruptcy code since September. Sale of the properties was a key element of the reorganization plan.

The Magnolia buildings involved in the sale include two buildings at Double R and Sandhill boulevards and the two buildings that make up the Magnolia South Meadows campus on Double Eagle Court.

About 13,000 square feet is vacant in the Magnolia Double R buildings, said Kathy Boyce of Dickson Realty Commercial. Along with Susan Chauncy of Dickson, Boyce is the leasing agent for the properties.

The Magnolia South Meadows buildings are currently completely occupied, Boyce said.

Aiman Noursoultanova, a senior vice president with CB Richard Ellis in Reno, represented the buyers.

She said they think the deal has significant upside potential, partly because of the possibility that more buildings can be developed on the Sandhill Boulevard property.

Returns also can be boosted, Noursoultanova said, as the vacant space in Magnolia Double R is leased. Demand for top-quality office space, particularly in the South Meadows area, has been strong in recent months, office brokers have said.

Tenants of the four buildings currently include AG Edwards, Alere Medical, Allied 1031 Exchange, Braeburn Capital Inc., SunCal and Eagle Picher.

At the time that the buildings' previous owners filed for Chapter 11 protection, secured creditors for the Double R property include the First National Bank of Nevada, which was owed $5.9 million, and First Independent Bank, which was owed $4 million. Wachovia Securities was owed $5.2 million on loans secured by the Magnolia South Meadows properties.

Development of the properties was spearheaded by Lizanne Stoever, who paid close personal attention to high-end finishing touches.

Initial plans for the Magnolia Double R complex, for instance, called for inclusion of an art studio, exercise studio and salon and day spa in addition to a restaurant.