$14M Plus Drives Swap of Scottsdale Commerce
By Amy Wolff Sorter
March 23, 2007
SCOTTSDALE, AZ – In a value-add play, Crown West Realty LLC has bought the 118,000-sf, five building Scottsdale Commerce Center. The five building office/flex complex has sold for $14.35 million, with the buyer planning to invest another $1.2 million into upgrades.
The Phoenix-based Crown West beat out 12 other bids for the center at 1375-1525 N. Hayden Rd. with its superior market knowledge, says Chris Toci, senior director with Cushman & Wakefield of Arizona Inc.’s Phoenix office. “They’ve run this several times before, where they go in, reposition the asset and work their magic,” he says.
Bob Olshan, vice president in the Southwest for Crown West, tells GlobeSt.com that renovations should take about six months to complete. The overhaul will include the facade, landscaping, signs and mechanical systems. “This fit perfectly within our strategy,” he says of the 81%-occupied center. “This has a lot of vacancy right now, or space becoming vacant shortly, allowing us to improve the rent roll.”
Toci estimates the roll will just top 40% during the next three years, giving the new owners an opportunity to boost rents that now sit at a 79 cents per sf, triple net to more than $1 per sf, triple net. “Even with that, they’ll still be below new construction-equivalent rents,” Toci says. “New products are going for $1.25 per sf to $1.35 per sf per month.”
Olshan says Crown West continues to look for value-add assets in the Phoenix area and nationally for its $125-million fund. He says the company will soon close on another asset in the CBD.
Pacific Development Partners LLC of Beverly Hills, CA was the seller. Its C&W team included directors Brian Ackerman, Ted Harrison and Pat Harlan. Crown West used in-house representation to negotiate its terms.