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1/03/13
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GLL Real Estate Partners, a German-based real estate investment entity, purchased Papago Spectrum, a 159.8k sf office building in Phoenix, AZ. The Class A, multi-tenant building sits at the geographic center of the Phoenix metropolitan market, at Priest Drive and University Drive, just off of the Loop 202 Freeway in Tempe, Ariz. From what we understand, the asset traded for around $21.6 mil, or around $135/sf.
The building is currently 91 percent occupied, with the University of Phoenix taking the top two floors of the project. Other recent five-year leases filled an additional 27k sf at the building.
Jones Lang LaSalle Senior Managing Director Dennis Desmond and Senior Vice President Brian Ackerman represented the seller in the deal. GLL was repped internally by Senior Vice President Christopher Quiett and Senior Associate Eric Ramm.
“Close proximity to Arizona State University and a strong local employment pool ensures that vacancy rates around Papago Spectrum are almost always in the single digits,” said Ackerman. “However, submarket rents are also still slightly depressed. With this building’s strong occupancy, it makes for a very stabilized core asset with solid room for improvement.”
According to JLL’s 2013 Outlook report, Phoenix office leasing velocity and stability is forecasted to improve and bring positive gains well into the first half of 2013. This is based on factors including, but not limited to:
• A development pipeline that will remain empty as the market burns through vacancies.
• A closing window of opportunity for securing low rents and concessions, especially in Class A properties.
• A number of large tenants in the market, spurring anticipation for back-office and customer service-related leases in 2013.
Similar transactions brokered by the JLL Phoenix office include the $20.8 mil sale of Scottsdale Centre, a 164k sf building on Scottsdale Rd near Camelback Rd; the $16.6 mil sale of Camelback Arboleda, a 179.8k sf, multi-tenant office building located at 16th St and Camelback Rd, in the heart of Phoenix’s prestigious Camelback Corridor; and the $23.3 mil sale of Agave Center, a 27-acre mixed-use property at Warner Rd and I-10 in Tempe, AZ that includes four office buildings, a flex industrial building and 4.6 acres of land ready for development.
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