Sunday, September 18, 2011

Office site in Tempe purchased for $137 mil

Fountainhead Office Plaza, a recently built office campus with two high-rise buildings in Tempe, has been sold for $137 million, representatives of the seller said Friday.

It was the first Phoenix-area office property to sell for more than $300 per square foot since the first quarter of 2008, they said, and the second office property to sell for more than $100 million within the past month.

Commercial-real-estate services firm CB Richard Ellis represented the seller, USAA Real Estate Co., based in San Antonio.

The buyer was an affiliate of KBS Realty Advisors, based in Newport Beach, Calif.

Kevin Shannon, vice chairman in CBRE's Torrance, Calif., office, said the Fountainhead sale was further evidence of investors' growing interest in buying Phoenix-area office properties.

Shannon said investors believed the Phoenix area would experience robust job growth in the next four or five years.

"Phoenix is on the upswing, from a capital-markets perspective," he said.

University of Phoenix has a long-term lease on the Fountainhead property, which totals more than 439,000 square feet.

Its two office towers were developed by USAA Real Estate along with Metro Commercial Properties and are at 1601 and 1625 Fountainhead Parkway in Tempe.

It includes a 10-story building, a six-story building and a six-story parking structure. Both buildings are leased to University of Phoenix through 2023.

"Investment activity is increasing in the Phoenix marketplace," said Bob Young, a senior vice president in CBRE's Phoenix office. "Fountainhead Office Plaza is one of two transactions of more than $100 million to occur in the area in the past three weeks."

The previous office purchase in excess of $100 million was the Phoenix corporate headquarters building of retailer PetSmart Inc., which sold in late August to a local real-estate-investment trust for $102.5 million.

Phoenix-based Cole Real Estate Investments, a REIT management company, acquired the 365,000-square-foot PetSmart headquarters at 19601 N. 27th Ave.

CB Richard Ellis represented the sellers, a group of institutional investors advised by Prudential Real Estate Investors, a subsidiary of Newark, N.J.-based Prudential Financial Inc.

Thomas Roberts, executive vice president and head of real-estate investments for Cole, said the ownership change would not have any noticeable impact on PetSmart, which leases the property.

Fountainhead Office Plaza is located within the master-planned Fountainhead Corporate Park. Both of its buildings were designed to achieve LEED Core and Shell Gold certification, which still is pending.

by J. Craig Anderson The Arizona Republic Sept. 17, 2011 12:00 AM

Office site in Tempe purchased for $137 mil

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