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KBP Realty Pays $8M for Deer Valley Flex Complex; Mark-Taylor Plans Upscale M-F Project in Scottsdale

10 Feb 2014, 11:04 pm

by Amalia Otet, Associate Editor

In an $8 million deal, KBP Realty Advisors has acquired Turner Spectrum Ridge, a 68,195-square-foot industrial flex property in Phoenix, from Newport Beach, Calif.-based Turner Real Estate Investments. The price translates to about $117.98 per square foot.

Turner Spectrum Ridge is a four-building, multi-tenant development located at 21025 North 8th Way and 21045-21111 North 9th Place, in the Deer Valley submarket, just north of the 7th Street exit on the Loop 101 Pima Freeway.

Developed in 2009, the property was 93.5 percent occupied at the time of closing.

Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley of Cassidy Turley’s capital markets group arranged the transaction.

“Spectrum Ridge’s location dynamics and configuration resulted in strong tenancy,” Buckley commented in a statement. “Combined with current positive leasing momentum, this set the stage for a competitive pursuit by numerous Investors looking for quality product with upside potential.”

In multi-family news, Business Real Estate Weekly of Arizona reports that Scottsdale-based Mark-Taylor Inc. has acquired a 16.7-acre tract in North Scottsdale, where it plans to build a 252-unit luxury multi-family community. The seller was LaSalle115 Holdings L.L.C.-Series 34 Villa Volterra, an entity affiliated with BMO Harris Bank in Chicago, as successor to M&I Bank.

Located at 7215 E. Silverstone Drive, the acreage is part of the 160-acre former location of the Rawhide Western Town theme park.  Now rebranded as Silverstone, the old Rawhide site is being redeveloped with retail, multi-family and single family residential, senior housing and a planned office park.

A 12-acre upscale strip mall anchored by Sprouts is under construction at the southeast corner of Pinnacle Peak and Scottsdale roads, with delivery scheduled for late 2014/early 2015. Vi at Silverstone, a continuing care retirement community, opened at the site in 2010.

Mark-Taylor’s planned rental complex is designed by Architectural Design Group and will feature one-, two- and three-bedroom units averaging about 1,100 square feet. Monthly rents are expected to average around $1,430.

Groundbreaking is scheduled for mid-2015, followed by opening about 10 months later. Mark-Taylor Development will serve as contractor. Development will cost an estimated $45 million, according to BREW.

Photo credit: 21045-21111 North 9th Place in Phoenix via Google Maps

CSM to Reinvent Phoenix Office Building as Select-Service Hotel; W.P. Carey Pays $23M for Avnet HQ In Tempe

31 Jan 2014, 10:59 pm

By Amalia Otet, Associate Editor

CSM Lodging plans to revamp the historic Professional Building–the former Valley Bank & Trust building–in downtown Phoenix, and turn it into a premium select-service hotel.

The hospitality company, a division of CSM Corp., completed the purchase on Dec. 20. “We look forward to working with Phoenix, which has been so supportive, to open the hotel in time for the city’s hosting of the 2015 Super Bowl,” said Bill Upshaw, president of CSM Lodging, in a statement.

Located at North Central Avenue and Monroe Street, the landmark property will undergo a $40 million makeover. Highlights include renovation of the Art Deco exterior, installation of new insulated windows; new mechanical, electrical and plumbing systems; and a complete refurbishment of the former bank lobby, which will serve as the main reception and gathering place for hotel guests.

The hotel will feature 165 guest rooms on 12 floors, a rooftop terrace, 5,000 square feet of meeting space, a business center, a 1,300-square-foot fitness center, and on-site parking. Additionally, the compound will host approximately 8,000 square feet of retail along Central Avenue.

As to the branding options, CSM Lodging tends to gravitate toward either Marriott or Hilton; but the dearth of Hilton product in downtown Phoenix should tip the scales in favor of the Hilton Garden Inn brand.

Upon opening, Hotel Monroe is expected to bring 105 jobs to downtown Phoenix marketplace, on top of 100-plus jobs created during construction and an overall economic impact of about $18 million.

In other news, W.P. Carey Inc. announced that CPA®:17-Global, one of its publicly-held, non-traded REIT affiliates, has acquired 8700 South Price Road (below left), a Class A office building in Tempe, for approximately $23 million.

Built in 2000, the 132,070-square-foot facility serves as the global headquarters of Avnet Technology Solutions, one of Avnet Inc.’s two operating groups. It is located on a nine-acre tract within the Arizona State University Research Park and has direct frontage on the Loop 101 freeway.

Commenting on the acquisition, Morgan Olsen, President of the Arizona State University Research Park board of directors and Arizona State University’s CFO, said in a statement: “We are delighted that W. P. Carey has purchased a property in the ASU Research Park. This acquisition validates the institutional quality of the facilities and tenants within the Research Park, currently home to 48 companies which provide over 4,500 high-quality jobs.”

Chris Toci, Chad Littell and Michael White of Cushman & Wakefield Inc. represented the seller, Atlanta-based Piedmont Office Realty Trust, in the transaction, according to AZRE Magazine.

Avnet, a major global distributor of electronic components, computer products and embedded technology, will continue to occupy the building under a long-term net lease. As part of its commitment to sustainability, the company is seeking to install solar panels  to improve energy efficiency .

Photo credits: Professional Building courtesy of CSM Lodging; 8700 South Price Road courtesy of W.P. Carey Inc. via PRNewswire

Younan Buys Class A Office Building for $7M; Hansji Urban to Start $80M Marriott Project

28 Jan 2014, 11:06 pm

By Amalia Otet, Associate Editor

In a $7.1 million deal, Woodland Hills, Calif.-based Younan Properties Inc. has acquired Black Canyon Corporate Center, a 94,203-square-foot office property in Phoenix. The price translates to about $75 per square foot. Black Canyon Center was 82 percent leased at the time of sale.

Built in 2002, the asset is a Class A, multi-tenant office building with a two-story lobby. It is located at 10835 North 25th Avenue, within 15 minutes of Sky Harbor International Airport and a half mile of the National YWCA Leadership and Conferencing Facility, Nearby shopping and dining destinations include the Metrocenter Mall.

Eric Wichterman,  Mike Coover,  Jeff Wentworth, and Sean Spellman of Cassidy Turley arranged the transaction on behalf of the buyer and seller. LNR Partners, the property’s seller, was represented by asset manager and special servicer John Mitchell.

“Black Canyon Corporate Center is arguably the highest quality office building in the Northwest Phoenix trade area,” Wichterman commented in a statement. “With a strong tenant base it offered a unique mix of stability with upside potential for Younan Properties.”

In hospitality development news, the Phoenix Business Journal reports that Irvine, Calif.-based Hansji Urban plans to start work on an $80 million project within the historic Luhrs block in downtown Phoenix.

Dubbed the Luhrs City Center Marriott, the 19-story structure will replace a two-story office building on the northwest corner of Madison Street and Central Avenue. The site is located within Luhrs City Center, a Hansji-owned city block consisting of mixed-use, office, retail, parking and development sites. Hansji acquired the property in October 2007 with plans to return the area to its former vibrancy.

The 320-key hotel will host two brands: Courtyard by Marriott, which will take over the lower 120 rooms, and a 200-key Residence Inn by Marriott.

Groundbreaking is scheduled for this spring, followed by 22 months of construction.

Photo credit: Luhrs City Center via Hansji Urban Facebook Page

TDI Starts 332-Unit Luxury M-F Project at One Scottsdale

20 Jan 2014, 5:19 pm

By Amalia Otet, Associate Editor

Irving, Texas–based TDI Real Estate Holdings L.L.C. has broken ground on Jefferson on Legacy, a 322-unit luxury apartment community. The project is part of One Scottsdale, a 115-acre mixed-use development in North Scottsdale.

Jefferson on Legacy is the second phase of a planned 750-unit residential development and is scheduled for completion in 2015.

“Jefferson on Legacy will be the premier luxury multi-family project in north Scottsdale to meet a growing demand for upscale housing in this submarket, which is a major employment center for the region,” said TDI executive vice president & investment partner Gus Villalba.

The multi-family community will offer 150 one bedroom/one bath apartments, 151 two bedroom/two bath apartments and 21 three bedroom/three bath apartment homes. Amenities include a controlled access gate, free Wi-Fi in all common areas, as well as a 10,400-square-foot clubhouse that features a lounge, media room, gourmet kitchen and fitness center.

Jones Lang LaSalle Inc. arranged a construction loan from Fifth Third Bank and equity financing from an institutional equity provider.

TDI currently has 2,608 units under construction in Texas, New York and Arizona and provides asset management for more than 5,294 units nationwide. The company plans to develop another 1,200 units over the next 12 months.

A joint venture of DMB Associates Inc. and Macerich, One Scottsdale could eventually comprise 1.8 million square feet of office and retail space, 1,100 upscale residential units and a 400-key boutique hotel at Scottsdale Road and the Loop 101 Freeway, according to the development’s website. Henkel AG’s North American headquarters anchors the office component.

One Scottsdale Rendering via DMB Inc.

P. B. Bell Closes on Sites of Luxury M-F Projects in Phoenix, Scottsdale

24 Dec 2013, 4:42 pm

By Amalia Otet, Associate Editor

P. B. Bell Cos. has closed on the site of a planned 244-unit luxury multi-family community about five miles from downtown Phoenix, the Scottsdale-based company said Dec. 19. Located at the intersection of 16th Street and Highland, the project is scheduled to open during the second quarter of 2015.

Dubbed Scape Modern Living, the complex will offer one- and two-bedroom units in three- and four-story building configurations. Units will feature nine-foot ceilings, complete appliance packages, granite countertops, balconies and walk-in closets. Common amenities include gated access, underground parking, attached garages, a heated pool and spa, residents’ lounge and exercise facility, theater room, fireplace and flat-screen TV. The community will be situated near Camelback Corridor and the Biltmore area.

P.B. Bell also said that it has closed on a 4.5-acre site in Scottsdale where it plans to build Cascàd, a 187-unit high-end apartment community. Located at Scottsdale Road and Mayo Boulevard, the project will feature a pool with spa, exercise facility and residents’ lounge, among other amenities. Cascàd is part of a planned mixed-use project that may also include retail, hospitality and office components.

The Greater Phoenix multi-family market has shown strong growth lately, with vacancy rates dropping and rents growing for the fourth consecutive year. According to Marcus & Millichap Real Estate Investment Services Inc., average monthly rents will end the year at $775, a 2.9 percent increase compared with 2012. Last year average rents increased 2 percent.

Nearly 2,900 new units have come on the market during the past 12 months, more than 1,900 of them during the second and third quarters. Some 7,600 units are under construction.

The largest of those projects are the Liv Ahwatukee in South Phoenix and Liv Northgate in Gilbert, high-end projects being developed by Grand Haven, Mich.-based Investment Property Associates. Scheduled for completion this coming spring, each community will comprise 402 units.

Photo credits: Rendering of Liv Northgate luxury apartments via official website

Whitestone REIT Buys N. Scottsdale Community Center for $37M

14 Dec 2013, 12:59 am

By Amalia Otet, Associate Editor

In a $37.4 million off-market deal, Whitestone REIT has acquired Market Street at DC Ranch, a 241,280-square-foot mixed-use neighborhood center in North Scottsdale, from DMB. The purchase price equates to $156 per square foot.

The property was 80 percent occupied at the time of closing and includes an adjacent land parcel that permits the addition of 35,000 square feet of leasable space.

Developed in phases between 1999 and 2003, Market Street primarily serves DC Ranch, one of Scottsdale’s signature master planned communities. It is located on the southeast corner of Thompson Peak Parkway and Pima Road and features a ‘main street’ theme incorporating 15 architecturally distinctive buildings that include 86,991 square feet of office space and 154,289 square feet of retail.

“While Market Street was not on the market for sale, we began discussing a possible purchase directly with DMB in early summer,” said Whitestone Chairman & CEO James Mastandrea in a statement.

The community center is anchored by a Safeway grocery store and showcases a diverse tenant base including Wells Fargo Bank, Fleming’s Steak House, Grimaldi’s Pizza, MidFirst Bank, McCormick & Co., and Edward Jones.

Market Street is Whitestone’s 21st acquisition in the Phoenix metropolitan area, and expands its local footprint to over 1.8 million square feet. Since its equity raise in October, the Houston based-REIT has invested $60.7 million in three properties, including Fountain Hills ($20.5 million), Corporate Park Woodland II ($2.8 million) and Market Street ($37.4 million).

Meanwhile, 7200 West Buckeye Road Industrial Investors L.L.C. purchased 7200 West Buckeye Road, a 400,000-square-foot industrial property in Southwest Phoenix for $26.3 million. Jones Lang LaSalle Inc. Managing Directors Mark Detmer and Bo Mills represented both the buyer and the seller.

Located on Buckeye Road within minutes of Interstate 10, the property is 100 percent leased through 2017 to Home Depot U.S.A. Inc. The building was built in 2009 and features amenities such as 32-foot clear heights, cross-dock loading, concrete truck courts and trailer storage.

Photo credit: Whitestone REIT via Business Wire

Liberty Property Trust Breaks Ground on 1 MSF Tempe Business Park

9 Dec 2013, 5:25 pm

By Amalia Otet, Associate Editor

Liberty Property Trust has broken ground on the first building at Liberty Center at Rio Salado, a 1 million-square-foot business park in Tempe and the REIT’s largest project to date in Arizona.

Scheduled for completion in mid-2014, the speculative two-story project at 1850 W. Rio Salado Parkway will feature 155,000 square feet of Class A office space. Additionally, the building is designed to achieve LEED Silver certification. Site preparation is currently under way for a sister building nearby.

In all, the first phase will include six office buildings and one industrial buildings, Liberty said in a statement. For the second phase, which will be located across the street, Liberty is eyeing plans for a hotel, retail space and additional office buildings.

“Our strategy is to create work environments that can make a difference in the quality of people’s lives,” said William Hankowsky, CEO of the Malvern, Pa.-based REIT, in a statement. “We believe that Liberty Center at Rio Salado—with its sustainable buildings and commitment to amenities such as an outdoor amphitheater and Wi-Fi—will provide a terrific location for creativity, productivity and innovation.”

At full build-out, the Liberty Center development will comprise as many as 11 buildings. It will also offer convenient access to Sky Harbor International Airport and to major Phoenix-area freeways. All buildings in the park will be designed to LEED standards and will emphasize energy efficiency and green practices.

As previously reported by Commercial Property Executive, Tempe tapped Liberty in 2012 as master developer of the 100-acre site at the northwest corner of Priest Road and Rio Salado Parkway.

Rendering of Liberty Center at Rio Salado via website

Freeport-McMoRan Center Receives TOBY Award; MIG Picks Up Class A Office Building

30 Nov 2013, 12:08 am

By Amalia Otet, Associate Editor

Freeport-McMoRan Center, a 26-story mixed-use building in downtown Phoenix managed by Transwestern, has received The Outstanding Building of the Year (TOBY) Award for 2013 from the Building Owners and Managers Association International’s Greater Phoenix chapter. The award recognizes Transwestern’s property management and operations skills in the corporate facility category.

The TOBY awards honor outstanding commercial office projects and recognize excellence in building management. During the competition, the building goes through a series of assessment procedures that evaluate everything from community involvement and site management to environmental and “green” policies and procedures, tenant relations programs, amenities package, building standards, energy management, accessibility and overall service.

Owned by National Electrical Benefit Fund, the three-year-old property serves as the corporate headquarters of Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper mining company. It is also home to The Westin Phoenix Downtown hotel and Province restaurant. In 2010, the building was named one of the best tall buildings in the Americas by the Council on Tall Buildings and Urban Habitat.

In office investment news, Newport Beach, Calif.-based MIG Real Estate has acquired Arcadia Gateway Center, an 89,835-square-foot, Class A office building in Phoenix, for an undisclosed price.

Located at 4222 East Thomas Road, the four-story property offers a variety of suite sizes with views of Camelback Mountain and the Phoenix Mountain Preserve. Additionally, the property features a three-story, detached parking structure. It was 93 percent leased at the time of the sale.

“Arcadia Gateway Center is one of the higher quality office properties along the 44th Street Corridor,” said Greg Merage, CEO of MIG Real Estate, in a statement. “We plan to continue investing in Phoenix, as it is in the early stages of recovery and is expected to outperform the U.S. in terms of office employment growth and corporate investment, as highlighted by the recent announcement from State Farm to increase its workforce by 6,000 employees.”

Arcadia Gateway Center offers convenient access to Phoenix Sky Harbor International Airport as well as to upscale shopping destinations including Downtown Scottsdale and Biltmore Fashion Park. Retail centers such as Arcadia Crossing and Desert Palm are within walking distance.

Photo credits: Transwestern via PRNewswire

Mark-Taylor Breaks Ground on Gilbert M-F Community; Crescent Kicks Off $61M M-F Project in Scottsdale

24 Nov 2013, 12:19 am

By Amalia Otet, Associate Editor

Mark-Taylor, Inc. recently broke ground on San Privada, a 296-unit luxury rental community in Gilbert. Located at 1480 E. Pecos in the Spectrum neighborhood, ‘the Next Generation’ complex will offer one-, two-, and three-bedroom homes with an average size of 1,087 square feet. Interiors will feature open kitchens with granite, distressed plank flooring, custom cabinets, bar-top seating with pendant lights, and oiled bronze fixtures.

Additionally, the community will showcase amenities such as resort-style swimming pool with sundeck, poolside cabanas and wet bar, whirlpool spa, and the industry’s largest on-site fitness center with a separate spinning studio, individual workout stations, and TVs. Leasing is scheduled to begin next May; rents will range from $900 to $1800, according to AZRE Magazine.

Meanwhile, Crescent Communities and joint venture partner Glimcher Realty Trust began construction on Crescent Scottsdale Quarter, a $61 million, 275-unit luxury apartment complex. Scheduled to open in the spring of 2015, it will be the first residential component of Scottsdale Quarter, Columbus, Ohio-based Glimcher’s 28-acre mixed-use development at Scottsdale Road and the Greenway-Hayden Loop.

Charlotte, N.C.-based Crescent’s six-story building (pictured at right) will feature studios, one-bedroom and two-bedroom units. The community will offer a resort-style saltwater pool and two-story fitness center with views of the McDowell Mountains.

Crescent Scottsdale Quarter will also be among the first apartment communities in the city to comply with the 2012 International Energy Conservation Code and International Green Construction Code, the company said in a statement.

The property will offer access to an upscale, 370,000-square-foot open-air center that features a tenant roster including Apple, Restoration Hardware, lululemon, Calypso St. Barth and True Food Kitchen. Scottsdale Quarter also includes 203,000 square feet of office space.

Crescent and Glimcher are providing equity for the project, and Regions Bank is the construction lender. Whiting-Turner Contracting Co. is the builder. The architect is Gromatzky Dupree & Associates. Nelsen Partners, Inc. is the design architect, and Kimley-Horn and Associates is the civil engineering partner.

Photo credits: Crescent Scottsdale Quarter

Apple Acquires 1.3 MSF Manufacturing Facility in Mesa for Supplier

21 Nov 2013, 3:59 pm

By Amalia Otet, Associate Editor

In a $113.57 million deal, Apple Inc. has purchased a brand-new, 1.3 million-square-foot industrial property on an 83-acre site in Mesa, the Phoenix Business Journal reported.

The complex is situated within Eastmark, a 3,200-acre master-planned community being developed by DMB Associates. Apple will join Grand Canyon University and BASIS Mesa, which have already set up shop at Eastmark. The facility was designed to house a cadmium telluride (“CdTe”) PV module manufacturing factory for First Solar Inc, a Tempe-based provider of comprehensive photovoltaic (PV) solar energy solutions. However, First Solar never commissioned manufacturing at the facility. On October 3, 2013, the company entered into an agreement to sell the facility to an unnamed buyer, later identified as Apple Inc.

Cupertino, Calif.-based Apple has purchased the compound for its supplier, GT Advanced Technologies Inc., which will use the facility to manufacture sapphire-glass goods and other components used in Apple products. As part of a multi-year agreement with Apple, Merrimack, N.H.-based GT will deliver low-cost, high-volume sapphire material. GT plans to employ over 700 people in the first year. Additionally, the project is expected to generate approximately 1,300 construction and associated jobs. Apple will provide an estimated $578 million prepayment, which GT will reimburse over five years starting in 2015, the company said in a statement.

“Apple’s commitment to manufacturing that will rely on renewable energy further demonstrates its forward-thinking, progressive nature and Arizona’s advanced capabilities in producing and delivering renewable power,” said Sandra Watson, President and CEO of the Arizona Commerce Authority. “Salt River Project has been instrumental in working with Apple to create additional advanced renewable energy sources that will power next-generation manufacturing.”

Rendering of the First Solar facility in Mesa via DMB Associates

Buchanan Street Buys $52.6M Portfolio; Hines’ Camelback II Earns State’s 1st LEED Platinum for Existing Buildings

21 Nov 2013, 3:58 pm

By Amalia Otet, Associate Editor

In a $52.6 million deal, Buchanan Street Partners has acquired a 10-building portfolio totaling 446,000 square feet in metropolitan Phoenix from Carlson Real Estate Co. The sale price equates to $118 per square foot.

The portfolio, which was 74 percent leased at the time of the sale, was purchased in four separate transactions and includes a mix of office, industrial, office flex and retail properties. Three of the assets are located in Cotton Center in Phoenix while the fourth is an industrial property in Avondale, in the Southwest Valley submarket.

The Cotton Center is a 280-acre mixed-use business park that integrates a variety of uses including office, industrial, service retail and hospitality.

Newport Beach, Calif.-based Buchanan Street Partners now owns more than 1.2 million square feet of commercial space in the Phoenix area. “This investment underscores our ongoing commitment to invest in Phoenix and select Valley submarkets,” said Tim Ballard, president of Buchanan Street Partners, in a statement. “The improving market fundamentals and the high caliber of tenants in these properties make this an attractive acquisition for us.” The transaction was structured by Eastdil Secured.

Meanwhile, 24th at Camelback II, a 307,000-square-foot Class A office building situated in the heart of Phoenix’s Camelback submarket, has achieved LEED Platinum certification under the U.S. Green Building Council’s existing building program.

Owned by Hines and an East Coast pension fund advised by Invesco, the property is Arizona’s first LEED-EB Platinum building and also earned the ENERGY STAR label in 2012.

Located on an 8.5-acre site at the southwest corner of 24th Street and Camelback Road, the 11-story building was developed by Hines in 2010. The project’s designer, Pickard Chilton Architects of New Haven, Conn., also designed the neighboring 24th at Camelback I. Also managed by Hines, that building earned LEED Gold designation.

Green highlights of 24th at Camelback II include: reduced heat island effect through covered parking and reflective roofing; use of low-VOC materials and finishes; a 30 percent reduction in indoor, potable water usage; electronic waste recycling programs; a 60 percent reduction in landscaping-related water consumption; enhanced indoor air quality systems; and a construction waste diversion rate greater than 50 percent. Additionally, Hines offers its GREEN OFFICE for Tenants program, which is focused on inspiring enhanced sustainable behavior among tenant groups. (Hines)

Alliance Plans 316-Unit M-F Project in Scottsdale; Bridge Investment Group Pays $38M for Mesa M-F

3 Nov 2013, 7:36 pm

By Amalia Otet, Associate Editor

Alliance Residential has acquired a 5.4-acre multi-family development tract at 75th Street and Stetson Drive in Downtown Scottsdale, and plans to break ground on an upscale 316-unit project by the end of the year.

The company purchased the property for $18.5 million from Equity Partners Group, a division of Scottsdale-based Triyar Cos.  The sale price equates to $58,544 per unit.

David Fogler and Steven Nicoluzakis, executive vice presidents with Cassidy Turley multi-family investment group and Don Arone of the firm’s office group, represented the seller and brokered the transaction. “This is a premier multifamily development site located in the center of the Entertainment District in Downtown Scottsdale,” Nicoluzakis said.

Development costs are expected to run between $65 million and $70 million, according to Business Real Estate Weekly of Arizona.

In other multi-family news, Business Real Estate Weekly reports that Murray, Utah-based Bridge Investment Group Partners L.L.C. purchased Aventerra at Dobson Ranch (pictured at right), a 576-unit lakefront apartment community at 1960 West Keating Ave. in Mesa, for $38.4 million, or $66,710 per unit. The seller was an affiliate of Los Angeles-based Summit Equity Investments. Mark Forrester and Ric Holway of Hendricks-Berkadia in Phoenix arranged the transaction.

Built in 1980, Aventerra at Dobson Ranch underwent extensive renovation in 2012. Units feature high quality finishes, simulated wood flooring, stainless steel appliances and cherry or white cabinetry. Common amenities include a resort-style pool and spa and a playground.

Photo credits: Aventerra at Dobson Ranch Facebook page

Diversified International, Alliance Residential Buy Tempe M-F Asset for $15M

26 Oct 2013, 8:52 pm

By Amalia Otet, Associate Editor

In a $15 million deal, Diversified International Partners and Alliance Residential acquired Dorsey Place, an 84-unit, condominium-style apartment building in Tempe, from Stratford Partners and Pathfinder Partners.

Built in 2007, the four-story, 96,400-square-foot building is located on East University Drive, less than a mile from Arizona State University and near several major corporate projects under construction. It offers two-bedroom and three-bedroom apartment homes with upscale finishes, granite countertops and stainless steel appliances. Community amenities include underground parking, a heated swimming pool in a central courtyard and a resident clubhouse.

San Diego-based Stratford Partners and Pathfinder Partners were represented by Transwestern’s multifamily team in Phoenix, led by Vice Presidents Jack Hannum and Bret Zinn and Financial Analyst John Drowns.

Diversified International and Alliance Residential, both of Phoenix, plan to add value through such improvements as converting vacant first-floor retail space into residential units, adding a fitness center and renovating common-area amenities.

“With State Farm currently building 2 million square feet of office space on nearby Tempe Town Lake, there is growing demand for multi-family residential units here,” commented Hannum in a statement. “So in terms of timing, this is a win-win for the Dorsey Place buyers and sellers, as well as the City of Tempe.”

The North Tempe/University submarket led the area in rent growth during the past year, with average prices rents climbing 12 percent to $1,026 per month. According to Marcus & Millichap Real Estate Investment Services Inc., nearly 1,600 units were brought into service in the past four quarters, which contributed to the spike in rates.

Demand for apartment assets remains strong throughout metropolitan Phoenix, with 147 apartment property sales completed in the 12 months ending October 2013, according to research by Pierce-Eislen. Sales increased 5 percent year over year compared to the same period in 2011-2012. Development is also picking up, with 36 properties and 7820 units currently under construction.

Photo credit: Transwestern 

Liberty Acquires 2 Tempe Industrial Buildings as Part of $1.5B National Deal

19 Oct 2013, 7:51 pm

By Amalia Otet, Associate Editor

Liberty Property Trust has acquired two buildings in Tempe as part of a national 177-asset industrial deal that adds about 23 million square feet to its industrial portfolio.

Malvern, Pa.–based Liberty bought the operating partnership of Cabot Industrial Value Fund III for $1.5 billion. Approximately 58% of the total portfolio is located in existing Liberty industrial markets, including Chicago, south Florida, Houston, New Jersey, Maryland, Arizona and central Pennsylvania. Ten million square feet of the portfolio are located in 10 markets where Liberty did not previously have a presence, including Atlanta, Dallas-Fort Worth and Southern California.

Located at 1858 East Encanto Drive and 475 West Vaughn St., the two Tempe properties add 149,271 square feet of space to the company’s local portfolio. Liberty owns and manages approximately 3 million square feet of industrial space in Scottsdale, Phoenix, Tempe, Goodyear and Tolleson. Those holdings include Liberty Logistics Center, Liberty Cotton Center, Liberty 303 Business Park, Liberty Tolleson Center, Liberty Sky Harbor Center. Also in the REIT’s Arizona portfolio is the office building at 8501 East Raintree Drive, which has earned LEED Gold and Energy Star certification.

According to John DiVall, Liberty’s senior vice president and city manager, Tempe is a strategic location for tenants and one of the strongest areas for growth in metropolitan Phoenix. “This acquisition is very exciting to us because it allows us to expand out footprint in Tempe and further our relationship with the City,” he said in a statement.

In 2012, Tempe tapped Liberty as the master developer for a 100-acre site located at Priest Road and Rio Salado Parkway. The planned 1 million-square-foot project, Liberty Center at Rio Salado, will integrate office, flex, industrial, and retail components and will be designed to meet LEED certification standards.

Investor interest in the industrial market remains strong Valley-wide, with total vacancy levels, excluding Flex properties, at 12 percent, according to Jones Lang LaSalle Inc.

The development pipeline remains active with 5.2 million square feet currently under construction. The Southwest Region is second only Southern California for both speculative and build-to-suit development. One major project was delivered in the third quarter of 2013, a 1.2 million-square-foot distribution building at 5501 SE Lower Buckeye Ave. which is fully occupied by TJX.

Charts courtesy of Jones Lang LaSalle Inc.

Sentinel Buys Luxury M-F in Scottsdale for $58M; Fountain Hills Plaza Commands $21M

11 Oct 2013, 2:44 pm

By Amalia Otet, Associate Editor

In a $57.8 million deal, New York City-based Sentinel Real Estate Corp. purchased The Paragon at Kierland, a 276-unit, Class A luxury apartment complex located on the Westin Kierland Golf Course in Scottsdale, from Sunstone Realty Advisors of Vancouver, Canada. The sales price equates to $209,239 per unit or $200 a square foot.

According to Colliers International, which structured the deal, the transaction is the highest per unit sale to date in 2013 and the highest per unit sale in the last five years for properties without an active condo map in the Phoenix market. More than 65 investors bid on the property and 22 investors placed bids at more than $50 million, Colliers reported.

Colliers’ team of Jerry Tenge, senior vice president of multifamily investments; and Tristan Charlesworth, an associate; exclusively represented Sunstone.

Located at 15608 N. 71st Street, The Paragon sits on a 10.4-acre pad within walking distance of 30 restaurants and more than 100 specialty shops at Kierland Commons and Scottsdale Quarter.

The complex was built in 2000 and underwent extensive renovations in 2008. Consisting of 289,233 rentable square feet in 23 three-story buildings, along with a single-story recreation building, the property features one-, two- and three-bedroom apartment homes ranging in size from 924 square feet to 1,323 square feet. Community amenities include a lagoon-style pool with a whirlpool spa, fire pit and cabanas, a fitness center, and lush landscaping. Occupancy was 98 percent at the time of closing.

In retail investment news, Whitestone REIT acquired Fountain Hills Plaza, a Class A neighborhood retail center in Fountain Hills, for $20.5 million. Located at 16605 Palisades Blvd., the 111,289-square-foot center is jointly anchored by grocery and hardware stores. It serves Fountain Hills, an affluent master-planned community of 10,000 households.

According to James C. Mastandrea, Whitestone’s chairman and CEO, the transaction reflects the Houston-based-REIT’s strategy of picking up off-market properties with significant value-add potential. Included in the deal was an adjacent one-acre development-ready pad site that could accommodate an additional 7,000 square feet of multi-tenant retail space.The center and adjacent parcel were acquired for a combined price of $185 per leasable built square foot.

Whitestone’s holdings in metropolitan Phoenix encompass 20 community centers totaling 1.6 million square feet, plus four land parcels that are available for future development. The REIT’s other recent acquisitions include Mercado at Scottsdale Ranch, The Pinnacle of Scottsdale, The Shops at Pinnacle Peak, Terravita Marketplace, Village Square at Dana Park, and Anthem Marketplace.

The Paragon at Kierland rendering via Official Website

Fountain Hills Plaza photo courtesy of Business Wire

DMB Sells Tempe’s Centerpoint on Mill for $38M; Wood Partners to Build Luxury M-F Complex in Scottsdale

4 Oct 2013, 6:51 pm

By Amalia Otet, Associate Editor

In a $38.4 million deal, Scottsdale-based DMB, Inc. sold Centerpoint on Mill, a 127,027 square-foot mixed-use property in the downtown Tempe, to Mill Avenue Retail L.L.C. of Scottsdale.

Glenn Smigiel, Bob Young, Steve Brabant and Rick Abraham with(photo here) CBRE Group Inc.’s Phoenix office negotiated the sale on behalf of DMB. Mill Avenue Retail L.L.C. represented itself.

The upscale office-retail development is located on a 22-acre tract at the northwest corner of Mill Avenue and University Drive, near Arizona State University, the Mill Avenue District and METRO light rail station.

Overall, Centerpoint on Mill was 87% leased at closing and its office space was 100% leased. AMC Theatres, Lincoln Strategy Group and One Energy will soon join a tenant roster that includes Churchill’s Fine Cigars, Devil’s Diner, Fat Tuesday, and Five Guys. Parking rights to approximately 720 parking spaces were also included in the deal.

Launched in partnership with the City of Tempe almost three decades ago, Centerpoint on Mill was DMB’s first large-scale mixed use development. Over the years, the property served as a catalyst for new development, attracting businesses, entertainment, national office and retail users to Mill Avenue.

Tempe is currently one of metropolitan Phoenix’s strongest submarkets, with a 5.1 percent Class A office vacancy rate, well below the metro average of 18 percent, according to CBRE.

In multi-family development news, Wood Partners plans to break ground in December on Alta Scottsdale, a $38 million, 218-unit luxury apartment project.

Designed by Dallas-based Womack+Hampton Architects L.L.C., the 190,000-square-foot rental community will be situated on a 6.5 acre pad one mile from downtown Scottsdale. The development will consist of two four-story Italianate buildings offering 140 one-bedroom units, 76 two-bedroom units and two three-bedroom apartments. Units will feature granite countertops, stainless steel appliances, vinyl plank flooring and many locally sourced materials. Community amenities will include a club room and bar area, a fitness center and a Frank Lloyd Wright-inspired pool area.

Completion is set for summer 2015. Pre-leasing is expected to start in November 2014, with rents about 30 percent lower than typical high-end apartments in the local market. Wood Partners will serve as its own general contractor.


Photo credits: Centerpoint on Mill official website

Cole Acquires $56M Office Portfolio; Walton Street, Everest Holdings Pay $24M for Tempe Office Building

27 Sep 2013, 5:05 pm

By Amalia Otet, Associate Editor

In a $23.5 million deal, a joint venture of Chicago-based Walton Street Capital L.L.C. and Scottsdale-based Everest Holdings has acquired Elliot Corporate Center, a 223,392-square-foot Class B office building in Tempe.

Jim Fijan and Will Mast of CBRE Group Inc.’s Phoenix office represented the seller, a tenants-in-common group sponsored by Thompson National Properties L.L.C. of Costa Mesa.

“This transaction is another example of the continued demand for office investment properties in the southeast Valley,” said Fijan in a statement. “Savvy investors recognize the continued strengthening of the market and well-located, well-taken-care of assets, like Elliot Corporate Center, are going to be well received.”

Located at 875 E. Elliot Road, the two-story, Class B office asset was 87% leased at the time of the sale. The University of Phoenix is the anchor tenant, occupying 162,069 square feet. Lamson Business College occupies another 32,400 square feet. Built in 1998, Elliot Corporate Center offers a wide range of amenities as well as access to Interstate 10 at Elliot Road.

In other office acquisition news, Business Real Estate Weekly of Arizona reported that an affiliate of Cole Real Estate Investments acquired three properties totaling  304,637 square feet in Phoenix and Tempe for $56.3 million, equivalent to $185 per square foot on average. The seller was LBA Realty in Irvine, California.

The assets are the 122,646-square-foot DeVry Building at 2149 W. Dunlap Ave., which serves as DeVry University’s Phoenix campus and traded for $23 million; Cotton Center II, a 99,734-square-foot back-office building located in the Cotton Center Business Park at 4121 E. Cotton Center Blvd., Phoenix ($18.9 million); and the 82.257-square-foot Rio Salado Corporate Center (pictured at right). Located at 1415 W. 3rd Street in Tempe, the property sold for $14.4 million, according to BREW.

Photo credit: LBA Realty

Gelt Buys Tempe M-F Complex for $15M; IHG Opens Holiday Inn Express in Scottsdale

20 Sep 2013, 9:21 pm

By Amalia Otet, Associate Editor

In a $15 million deal, Gelt Inc., has purchased Versante Apartments, a 240-unit multi-family complex in Tempe. The Tarzana, Calif.-based company made the value-add transaction with Prudential Real Estate Investors.

Located at 1330 W. Broadway Road, the 184,752-square-foot property was built in 1971 and is 94 percent occupied. It features one- and two-bedroom units averaging 770 square feet in size. Community amenities include two pools, a fitness center, basketball court, clubhouse and barbecue and picnic areas.

“This sale is representative of a recent trend with older properties,” said Jim Crews of Cushman & Wakefield  Inc., who marketed the property and procured the buyer. “Investors seeking excellent returns and better locations are able to purchase great infill properties such as Versante. After a few modest interior improvements, this asset will provide residents and Gelt with an appealing apartment building in an outstanding location.”

In hospitality news, InterContinental Hotels Group announced the grand opening of its Holiday Inn Express Hotel & Suites Phoenix North/Scottsdale, a four-story, 104-key hotel in Scottsdale.

The new addition to IHG’s portfolio in the Phoenix metro is located at 4575 E. Irma Lane in Scottsdale’s Desert Ridge area. The 60,000-square-foot property is also near the Wild Fire Golf Course, the Musical Instrument Museum as well as several corporate headquarters. Guest rooms feature contemporary styling, 32-inch high-definition TVs, refrigerators and microwave ovens. Hotel amenities include a swimming pool, a meeting room that can accommodate up 32 attendees, a 24-hour fitness center, complimentary high-speed Internet access and a business center.

Photo credit: Gelt Inc.

Plaza Cos. Plans Fall Start for SkySong’s 3rd Office Building

30 Aug 2013, 8:29 pm

By Amalia Otet, Associate Editor

Plaza Cos. plans to break ground this fall on the third office building at SkySong-The ASU Scottsdale Innovation Center. To be located at 1475 North Scottsdale Road, near the 42-acre mixed-use development’s signature shade structure (pictured at right), the $32 million, 145,000-square-foot building will be a candidate for LEED certification.

Arizona State University will occupy one and a half floors of the four-story structure, and WebFilings will be expanding its presence by leasing a full floor in SkySong III. Plaza itself will take space on the first floor.

Plaza is SkySong’s master developer, in partnership with the Arizona State University Foundation and the city of Scottsdale. Holualoa Cos. of Tucson has recently partnered with Plaza on the project, according to the company. Alliance Bank of Arizona is providing financing for SkySong III, Butler Design is the architect and DPR will serve as general contractor.

At full build-out, the SkySong development will contain 1.2 million square feet of office, research and retail space. Additionally, plans call for a hotel/conference center as well as a $44 million residential project that would include 325 apartment units. The first 83 residential units are scheduled to open in October.

The development’s first two buildings, totaling 300,000 square feet of office space, are almost fully occupied. SkySong III is is already 65 percent leased and pre-leasing continues on SkySong IV which is fully permitted and “shovel-ready”, according to the developers.

“SkySong was built to create a unique location for companies with a focus on innovation and technology, and the project has succeeded in becoming a hub for forward-thinking entrepreneurship,” said Don Couvillion, vice president of real estate for the Arizona State University Foundation.

SkySong is currently home to more than 1,000 employees and 50 companies. Completion of SkySong III and IV and the apartments would bring the development to almost 900,000 square feet.

Photo credits: ASU SkySong

Inland American Pays $103M for Student Housing Project in Tempe

24 Aug 2013, 7:28 pm

By Amalia Otet, Associate Editor

In a $103 million deal, Inland American Communities Group Inc. has acquired Hub on Campus, a 640-bed student housing community near Arizona State University in Tempe, from Core Campus L.L.C., the property’s developer.

Brad Goff, a principal of Apartment Realty Advisors who worked on the transaction, told the Phoenix Business Journal that Core Campus will reap significant proceeds from the sale of the $42.6 million project.

Inland American Communities, an affiliate of Inland American Real Estate Trust Inc., is re-branding the 19-story property University House. Additionally, the project includes 21,842 square feet of ground-floor retail space and adjacent land for future development.

Located on a high-traffic corridor at the north end of campus, across the street from Sun Devil Stadium and near the Mill Avenue entertainment district, University House will provide residents with access to ASU’s Tempe and downtown Phoenix campuses.

Units feature custom furniture, flat-screen TVs, stainless steel appliances, in-unit washesr and dryers,  private patios and balconies.

Common amenities include two resort-style pools, a clubroom with gaming systems, an indoor/outdoor fitness center, a 22-foot LED outdoor TV screen, a yoga and steam room, a tanning salon, outdoor grilling stations as well as indoor/outdoor study areas and conference rooms.

Renderings courtesy of Hub On Campus

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