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6/07/24
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The leasehold interest in Sky Harbor Center, a recently upgraded 534.8k sf office campus on 37 acres in Phoenix, was acquired for $44.3 mil by a private investment partnership. The ground lessor is the City of Phoenix.
Sky Harbor Center consists of five office buildings plus a parking garage. The property is fully leased long-term to Bank of America, which has tenanted the property since 1989.
Located at 825 Buckeye, Sky Harbor Center consists of all two- and three-story buildings surrounding a pedestrian mall with trees, lawns, and outdoor collaboration spaces. The campus features a fully renovated café, coffee/juice bar, and conference center as well as outdoor areas for seating and events.
The campus also boasts a 5/1000 parking ratio through its surface and garage parking options. The property is also adjacent—with visibility and signage—to Phoenix’s primary freeway, Interstate 10, and near the Sky Harbor Airport.
Cushman & Wakefield’s Steve Lindley and Alexandra Loye represented the seller in the transaction, in cooperation with Will Strong and Molly Hunt of the firm’s National Industrial Advisory Group - Mountain West and Eric Wichterman and Mike Coover with the firm’s Private Capital Group. The firm’s Jerry Roberts and Pat Boyle also provided leasing advisory.
According to Cushman & Wakefield tracking, the transaction is the largest office sale in Phoenix Metro based on square footage and among its highest valued year-to-date 2024.
“Office properties are selling again as price discovery emerges and lenders slowly return to the market. Some investors are pursuing office assets for their risk-adjusted higher yield than alternative property types,” commented Lindley. “For the most part, however, buyers will only pursue the best office assets, and that have credit tenancy, a strong location, and appealing on-site or nearby amenities. In the case of Sky Harbor Center, the demonstrated tenant commitment created significant buyer interest.”
“This modern office campus is unique in that its multiple-building configuration provides exceptional flexibility and optionality for the existing long-term tenant, as well as any potential future tenant leasing opportunities,” added Loye. “The property’s Sky Harbor location, adjacent to the airport and in the heart of the Phoenix transportation network, continues to attract strong corporate occupiers.”
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