|Excel Trust has acquired Promenade Corporate Center, a 256.2k sf office project in Scottsdale, AZ, for $56 mil ($219/sf). The property consists of two four-story Class A buildings and a three-level, 800-space parking structure.
The transaction represents the second, and final, part of the larger sale of Scottsdale Promenade in Scottsdale for a total consideration of $166 mil. The initial leg of the sale was during the third quarter of 2011, when the retail component was acquired for $110 mil, also by San Diego-based Excel, as reported on RENTV at the time.
Mark Lucescu of Lucescu Realty represented the seller, a local private investor, and also procured the buyer, a publicly-traded NYSE REIT, in the office sale. Lucescu also represented the seller in the earlier sale, of the retail component.
Scottsdale Promenade, a 1 msf, mixed-use project, is one of the largest and most dominant commercial properties in the Phoenix MSA and combines a unique mix of large box retailers, specialty boutiques, restaurants, and Class A offices. The retail component includes a power center totaling approximately 730k sf of GLA; anchored by Lowe’s Home Improvement, The Great Indoors, Nordstrom Rack, Office Max, PetSmart, Old Navy, Michaels, SteinMart, Trader Joe’s, Cost Plus World Market and Pier One Imports.
Located on 84 acres, the entire project is known by many as the “Gateway to Scottsdale." Built in 1999, the Frank Lloyd Wright-inspired project is located at one of Scottsdale’s most prominent intersections, Scottsdale Rd and Frank Lloyd Wright Blvd, one mile south of Loop 101, and immediately north of Scottsdale Municipal Airport and is at the center of the highest income demographics of any location in metropolitan Phoenix. Within a one-mile radius, the estimated average household income is over $117k.
Lucescu expects the transition of this second part to Excel to be a seamless one as they had already assumed management of the entire project when they initially acquired the retail component. Lucescu, in discussing the latest market trends, noted that "We expect core and core plus offerings to continue to garner the greatest demand due to the dearth of available inventory and the surplus of capital pursuing these types of offerings. Class B and C properties will continue to experience declining lease rates due to increasing vacancies and increasing competition from Class A assets as tenants trade up to higher quality locations with similar lease rates."