Pentzer Property Lures Buyers Wwp Subsidiary Strikes Deal To Sell Itron’s Land, Building

A San Francisco real estate investment trust has agreed to purchase the land and building occupied by Itron Inc. for $8 million, Pentzer Development Corp. President Richard Rollnick said Tuesday.

The pending deal could be a precursor to the sale of all Pentzer real estate assets for a sum well in excess of $50 million, he said.

“The buyers have descended on us en masse,” said Rollnick, who added that a “war room” has been set up at Pentzer Development’s prime asset, the Spokane Industrial Park.

The war room contains the voluminous financial and legal documentation buyers need to assess the holdings, he said.

Pentzer Development manages all the real estate assets of Pentzer Corp., the holding company for all non-utility assets of the Washington Water Power Co.

Rollnick said Pentzer wants to liquidate its real estate to raise funds for other, higher-yielding ventures.

Pentzer has been an active buyer and seller of telecommunications and other businesses in recent years, in the process adding significantly to WWP’s income.

Rollnick would not identify the Itron property buyer, which has signed a letter of intent. The transaction is subject to Itron, partially held by WWP, remaining in the building, he said.

The Itron property fronts Sullivan Road south of Pentzer Development’s major holdings, the Spokane Business Park and Spokane Industrial Park.

Together, the two encompass 355 acres and more than 4 million square feet of leasable space.

Rollnick said Pentzer is asking $53 million for the properties. About a dozen institutional buyers are interested, he said.

“It’s amazing the acceptance of Spokane as an institutional real estate investment market,” Rollnick said. “You wouldn’t have found that just two years ago.”

He said Spokane is characterized as a “tertiary” market, one outside a major city or its suburbs.

Tertiary markets are attracting more interest from real estate investment trusts and other institutional investors.

As technology erases the disadvantages of doing business away from major cities, Rollnick said investors anticipate more development in smaller communities.

“You don’t have to be in a major metropolitan market to compete,” he said.

Rollnick said Pentzer Development had net operating income of $5.2 million in 1994.

Besides the industrial and business parks, Pentzer owns 160 acres in two parcels north and south of those properties, 272 acres east of Barker Road and north of the Spokane River, and 215 acres around the Boeing Co. plant on the West Plains.

Rollnick said he expects the institution that buys the parks to take the properties adjacent to the industrial and business parks as well. A sale is likely before the end of the year, he said.

The just-completed Euclid Business Center, which was shown to about 100 members of the Spokane real estate community Tuesday, will not be included in the sale.

Rollnick said four buyers have expressed interest. A separate sale of that building for a price in the neighborhood of $1.3 million could come within the next two months, he said.

The Boulder Park and West Plains properties have not been put on the market, Rollnick said.

He said the decision to sell the Pentzer properties has nothing to do with the pending merger of WWP and Sierra Pacific Resources.

He and Pentzer Development’s 14 other employees have been working for a year to position the assets for sale, he said.

The Sierra Pacific merger was not announced until June, although tentative discussions started in January.