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$33M may be a big price tag to pay for a suburban Phoenix office, but Buchanan Street Partners says snapping up Stapley was all about replacement cost. (It's cheaper to buy used than new with buildings, cars, and futons.)  Buchanan Street's Brian Payne says it bought the two-building, 180k SF Class-A property from DESCO Group at a 20% discount than what it would have cost to develop similarly. (Plus you would've had to find somewhere to park a backhoe.) It's also got the benefit of stabilized cash flow at 90% occupied with tenants such as Wells Fargo and Cigna Healthcare. Cushman & Wakefield's Chris Toci and Chad Little brokered the sale.  Buchanan Street isn't the only buyer paying steeper prices in Phoenix. According to a recent C&W report, 2700 Corporate Center in Chandler (above) traded to WP Carey & Co for a whopping $236/SF, and even The Corporate at Pima Center in Scottsdale sold to CarVal Investors for a cool $50M, or $184/SF. The reports says price per SF is up 3% so far this year.  Brian says Phoenix is one of the handful of markets Buchanan Street is focused on for its investments: Others include Denver, California, and Houston. The firm is shopping for both value-add and core-plus office and industrial properties, especially in the Southeast Valley (where it purchased Cotton Center IV recently, above) and Scottsdale. |
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Palisades Breaks $200/SF Palisades Capital Realty Advisors is another firm hot on the 'burbs. It recently snapped up Chandler Corporate Center I for $14M, another buy in which replacement cost was a factor, according to Joaquin de Monet. The 68k SF office property in (where else) Chandler hit $207/SF, a huge number for suburban office. It was brokered by JLL's Dennis Desmond for the seller, Held Properties.  It was also significantly below pricing Joaquin's seen for projects on Ray Road and the 101. This is Palisades' first buy into the Phoenix market, but Joaquin says it won't be the last. “We're exploring some adjacent properties and touring at least one more in the next couple of weeks,” he says. He adds that Palisades likes Phoenix because of the fundamentals, especially the growth in technology, healthcare, and education. Plus, he adds, there's a very educated labor pool and the city's affordable. (The Super Bowl will be here soon, to boot.) |
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Apartments Offering Discounts, Too |
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 In the apartment market, DC-based Equilibrium Villas just purchased the Villas at Roger Road, a 232-unit, Class-B apartment complex in Tuscon for $5.7M—or $24,500/unit, on the lower side of pricing for Phoenix multifamily. Colliers International's Bill Hahn, Jeffrey Sherman, and Trevor Koskovich brokered the deal. It's also a value-add play, as Jeffrey tells us it'll be able to increase rents through property repairs. |
 According to a recent Cushman & Wakefield report, many apartments are trading in the $20k/unit range. But there have been some whoppers, including Mission Palms, which was picked up by Bridge Investment Group Partners for $25.6M, or more than $71k/unit, and Oracle Village, snapped up by HSL for $62,500/unit. |
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