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12/30/19
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Susquehanna Holdings Ltd paid $90 mil for Grand 1, a 219.2k sf ($410/sf), Class A office building within Papago Park Center in Tempe, AZ. The four-story building, which includes an adjacent four-story garage, was sold by Lincoln Property Company (LPC).
Located along the Loop 202 freeway at 1101 W. Washington St, the building is fully occupied on a long-term, multi-story lease by Tokyo-based MUFG, one of the world’s leading financial groups, and a full top floor lease to global logistics leader SAP. The modern office environment offers flexible floorplates, high-end contemporary interiors, indoor and outdoor collaboration areas, a first-floor quick-serve deli and an on-site property management office.
Earlier this month, DoorDash also signed a full-building, 354.4k sf lease for LPC’s newly completed and adjacent Grand 2 building. This brings both office buildings at The Grand at Papago Park Center to 100% leased.
With the sale of Grand 1, LPC has completed three of the top five commercial real estate sales in Arizona in 2019, totaling $270 mil between Grand 1, the Waypoint office campus and Lincoln Logistics 40 in Goodyear, which was sold to Nike.
The Grand 1 acquisition also represents the Phoenix market entry for Susquehanna, a Florida-based holding company whose current portfolio includes office and industrial assets primarily concentrated in the Southeastern U.S.
The building is the first of 1.8 msf of Class A office space slated to be developed by LPC at The Grand at Papago Park Center, a mixed-use project totaling 60-acres and slated for 3.2 msf of office, multifamily, hotel, retail and restaurant space on the last developable parcel within the 350-acre Papago Park Center business park.
“The fundamentals of the Tempe market meet all of the criteria we look for. Combined with the premier building quality of the Grand 1, its strong credit tenants, its multi-modal access and Lincoln’s vision makes this a particularly attractive purchase,” said Susquehanna Holdings Managing Partner Matthew Wideman. According to Wideman, Susquehanna Holdings tends to look long term and sees Phoenix positioned to economically outperform most major Western U.S. markets in the coming years and decades.
The Grand at Papago Park Center offers approximately one-half mile of Loop 202 frontage, two freeway off-ramps and is bookended by two Light Rail stops, making it the first stop by light rail or by car coming out of Phoenix Sky Harbor International Airport and within minutes of Arizona State University. Together with a location on the north side of Tempe Town Lake, these advantages can cut employee commute times by 30 or more minutes compared to projects on the south side of the Lake.
The project was named after the adjacent Grand Canal, developed in the 1870s to bring water from the Salt and Verde rivers to Metropolitan Phoenix. The canal was relocated to run through The Grand project, creating a stunning central water feature surrounded by multi-use walking and biking paths.
Kevin Shannon, Ken White and CJ Osbrink from Newmark represented LPC in the sale of Grand 1. LPC serves as the developer, leasing agent and property manager for all office space at The Grand.
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