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6/09/16
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In a recent AZ office buy, , a 60.9k sf building located at 5416 E. Baseline Rd, between Baseline Rd and the U.S. 60 in Mesa’s Superstition Corridor. Built in 2001, the two-story office building sold for $4.9 mil, or about $80/sf.
The building sits on five acres, within walking distance to retail and restaurant amenities, and in a medical hub of the Southeast Valley that includes Banner Gateway Hospital, Banner MD Anderson Cancer Center, Phoenix Children’s Hospital and the Arizona Health & Technology Park (home to A.T. Still University of Health Sciences).
Dennis Desmond of JLL represented the eller, Omninet, in the transaction. Dave Seeger, Karsten Peterson and Mark Gustin, also with JLL, serve as the property’s leasing team and partnered with Desmond on the sale.
The property is considered a value-add opportunity. Mesa’s Superstition Corridor submarket over the past 12 months has experienced a significant improvement in vacancy rates as new office and medical users flock to the area.
“The Superstition Corridor is an exceptional market for value-add investors,” said Desmond. “G2 Capital recognized this early on, and has plans to capture that potential with strategic capital improvements. For a project that sits in the shadow of neighbors like Banner MD Anderson and A.T. Still University, the upside opportunity is significant.”
According to JLL, the Superstition Corridor office submarket already this year has achieved 167.8k sf of total net absorption, with an additional 170k sf of tenants expected to move in by year’s end. This has helped drive direct vacancy down from 27.9 percent in Q1 2015 to 22.4 percent in Q1 2016. It has also helped pushed average rents back above $23 per-square-foot, a rate nearing the $26.15 per-square-foot high water mark achieved in 2007.
“With a 44.4 percent occupancy rate, Inverness is in a prime position to fill its vacant space and maximize the benefits of an improving market,” said Desmond. “The 12 neighboring office buildings are currently 82 percent occupied. Surrounding medical office space is operating at more than 87 percent occupied.”
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