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11/04/14
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A venture between San Diego-based Douglas Wilson Companies and LA-based Karlin Real Estate recently acquired a 2.51-acre site in Tempe, AZ that is home to Hayden House, the oldest continuously occupied structure in Metropolitan Phoenix and Arizona, built 1871-1873. The new partnership, Hayden House Tempe LLC, paid $16.875 mil for the property, located at the southwest corner Mill Ave and Rio Salado Pkwy.
Hayden House plans to develop Mill & Rio Salado, a $200 mil mixed-use creative office and lifestyle-hotel development at the site, widely considered to be the gateway to Tempe’s downtown core. The project will consist of two towers: a 15-story, 280k sf Class A office building and a 16-story, 274-key Kimpton hotel, along with 17k sf of complementary restaurants and retail.
The historic Hayden House, one of Arizona’s original homesteads, will be preserved and repurposed as a destination restaurant to serve the Valley and the surrounding office and hotel guests. The building evolved from a typical Sonoran row house that was Charles Hayden’s family home until 1889, to a boarding house and eventually a restaurant that has been operating continuously in the building since 1924.
Carl Hayden, an Arizona Representative and Senator, was born in the home in 1877. Historians have labeled Carl Hayden “the most important person in Arizona history (even more so than John McCain).” Leonard Monti purchased the property in 1954, and the restaurant, at the time known as La Casa Vieja, was renamed Monti’s La Casa Vieja. The restaurant underwent several additions to the original historic structure.
Karlin Real Estate also provided the debt in this transaction. Cassidy Turley Executive Managing Director Brent Moser, Vice President Mike Sutton and Associate Brooks Griffith negotiated the transaction on behalf of the seller, Michael Monti’s Catering.
Hensel Phelps has been selected as the contractor for Mill & Rio Salado. Construction is expected to start in mid-2015 with completion in 2017. Jerry Noble, Patrick Devine and Greg Mayer with Cushman & Wakefield have been awarded the leasing assignment for the office space at Mill & Rio Salado.
North Tempe has emerged as one of the most desirable submarkets in the Valley. It boasts the lowest vacancy rates in Metro Phoenix, with a Class A Vacancy rate under 5%. It is home to several large office users in multiple industries. Real estate leaders cite access to ASU, Light rail, freeways, walk able amenities, and true Class A office space as the leading reasons Tempe is experiencing such dynamic attention from office tenants.
The Mill & Rio Salado site is located less than a block from Phoenix’s acclaimed light rail system, across the street from Tempe Beach Park and Tempe Town Lake. The development will complement the core of over 3 msf of Class A office in Downtown Tempe that has become a magnet for the technology industry due to its central location within the Phoenix Valley and its close proximity to Phoenix Sky Harbor Airport and Arizona State University.
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