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Lincoln Property Company and Invesco Ltd Spend $44 Mil on Historic Phoenix Property

12/23/15

Lincoln Property Company (LPC) and Invesco Ltd have purchased the historic Luhrs City Center, an office/retail complex in downtown Phoenix, for $44 mil. The joint venture will next initiate a multi-million-dollar renovation that will redevelop the landmark into a modern, mixed-use blend of creative office space, ground floor restaurants and retail.

Located at 11-45 W. Jefferson St, between Madison, Jefferson, First St and First Ave, Luhrs City Center includes two towers with 140.5k sf of creative office space and a promenade with approximately 18.5k sf of ground-floor retail space. It is situated within a resurging downtown that includes an active office market, thriving restaurants, sports venues and the early-2017 delivery of a directly adjacent, 19-story Marriott Residence Inn and Courtyard hotel tower.

“When you think of iconic downtown Phoenix buildings, you think of Luhrs,” said Lincoln Property Company’s Executive Vice President David Krumwiede. “They call the project ‘historically modern’ because it has a combination of deep roots and modern staying power. This makes it very relevant in today’s creative office market and a great site to enhance with dining and shopping – amenities that will raise Luhrs to its highest and best use in the downtown market.”

Built by the Luhrs family between 1924 and 1929, just before the U.S. entered the Great Depression, Luhrs City Center in recent years has undergone approximately $10 mil in capital improvements. This has modernized the development into a creative office environment with red brick interiors, exposed beams and similar features that have helped to attract a mix of office, tech and law tenants.

Luhrs City Center offers direct access to Phoenix Light Rail, CityScape, the Phoenix Convention Center, Arizona State University Downtown Campus, Chase Ballpark, the Maricopa County Court Complex and approximately 30 restaurants within a two-block radius. It is also immediately adjacent to the under-construction 19-story, 320-room dual branded Marriott Residence Inn and Courtyard hotel tower that will open in early 2017.

Office space at Luhrs City Center is currently 85 percent leased, with approximately 10k sf of available office space remaining and approximately 15k sf of available ground-floor retail space.

The renovation by LPC and Invesco will make improvements to the lobby, common areas, streetscapes and ground-floor retail. They will focus on leasing most of the ground floor space to “very unique and high-quality restaurant tenants who match the character and draw of Luhrs – users who are looking for this type of highly improved, move-in ready historic space that can position them for the level of success being achieved by surrounding bars and eateries,” said Krumwiede.

When it opened on April 1, 1924, the Luhrs Building was Phoenix’s first 10-story high-rise. For more than 40 years, the top four floors of the building were home to the Arizona Club. The 14-story Luhrs Tower was delivered five years later, in 1929, and for decades remained the tallest building in the Southwest. The towers and retail space at Luhrs City Center are served by an adjacent six-story parking structure with 434 spaces. All of the buildings are listed on the Phoenix Historic Property Register.

The property seller, Hansji Corporation, was represented by Newmark Grubb Knight Frank’s Executive Managing Director Jerry Jacobs and Managing Director Erik Marsh. Jacobs and Steve Callahan have been retained by LPC to handle the office leasing.

The purchase of Luhrs City Center caps off a record-breaking year for the Phoenix office of Lincoln Property Company, who since January has generated more than $233 million in metro Phoenix investment and development activity. This includes the $58 mil LPC-Oaktree Capital Management purchase of Biltmore Commerce Center in Phoenix, the $42.3 mil disposition of Camelback Square in Scottsdale and the $65 mil LPC-Goldman Sachs purchase of Promenade Corporate Center in Scottsdale. It also includes the development and delivery of the $24 mil Waypoint Building One office property in Mesa.


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