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Commercial Real Estate News 9-18-12

Sales and Major Leases

207 of the 230 Lakeside Village apartment units, 855 N. Dobson Rd., Chandler, have been sold to SP Lakeside LLC, Seattle, for $16.4M ($79K/unit). Seller Rose Lakeside Corp. I, Ontario, Canada, acquired the broken condominium in a foreclosure sale. The previous owner had sold 23 units before the market collapsed, and these units were not consolidated into reverse condo conversion. The project will now have the 23 condos and the new owners renting the remaining 207 units as unsubdivided apartments.

Photo Credit: Hayden Ferry Lakeside

Parkway Properties Inc., Orlando, Fla., is paying Sunbelt Holdings and Rockpoint Group LLC $16.2M for development rights to Hayden Ferry Lakeside III. The 250K SF, 10-story office tower, 40 W. Rio Salado Pkwy., was announced with great fanfare in April with Ryan Cos. and Sunbelt Holdings as developers. The city of Tempe owns the ground and Sunbelt holds the long-term ground lease. Parkway has spent $300M taking control of the existing buildings in the complex along with the parking garage. A new 270K SF parking garage is part of the building III development proposal. No groundbreaking date has been set.

 

Photo Credit: Insiae Tucson Business

Broadway Plaza shopping center, 7701-7865 E. Broadway Blvd., Tucson, was sold to Phillips Edison — ARC Shopping Center REIT, Inc. for $12.7M ($152/SF). Seller Larsen Baker used Marcus & Millichap in the transfer of the 83.6K SF complex.

Photo Credit: Commercial Executive Magazine

Once a Marie Calendar’s, then converted to its present use as a Wells Fargo branch, the 4.1K SF free-standing TradeCor LLC-owned building sold to 8155th Ave LLC, New York, for $9.2M, a national record-setting $2,231/SF for a bank-occupied property. Colliers International represented the seller and ERG Property Advisors handled the transaction for the buyer. Located at 3102 E. Camelback Rd., Phoenix, the building—on a little under one acre with 16 more years left on the Wells Fargo lease—is seen as a “trophy location.”

Scottsdale’s The Borgata retail complex, south of Lincoln Blvd. on Scottsdale Rd., has been sold by RED Development to Avatar Properties, Fla., for $12.8M ($136/SF). RED acquired the 99K SF complex in April for $9.2M ($98/SF), a nearly 40 percent increase in value in less than six months. Avatar immediately flipped 12.2K SF of restaurant space—J. Alexander’s and Blanco Tacos + Tequila—to Arizona Partners for $3.5M ($286/SF).

Centrado apartments sold to Jevan Capital for $12.35M ($69K/unit). The 180 unit complex is located at 2045 E Broadway Rd., Tempe, was sold by Merchant Property Group. The apartments are in 23 buildings.

Ethan Plaza, Guadalupe and McQueen roads, Gilbert, has sold for $9.3M ($182/SF) to Table Mound Mobile Home Park (Iowa). The 51.4K SF shopping complex is anchored by one of the new YouFit Health Clubs, Dutch Bros. Coffee and Phoenix School.

Photo Credit: Empire

William Kroll picked up the Empire Power Systems property, 830 N. 43rd Ave., Phoenix, from Greenwood & McKenzie for $3.8M ($69/SF). The industrial warehouse has 55.2K SF on 7.5 acres with 100 percent occupancy. Lee & Associates represented both sides of the transaction.

Photo Credit: We Know Urban Realty

Regency Apartments, 44 units, 1100 E. Lemon St., Tempe, has been acquired by a private California investor in a $3.3M ($75K/unit) deal with Capital Corporation. The two-story complex is located on 1.1 acres. No brokers were involved in the deal.

Photo Credit: Fairfield Architects

Aspen Alameda Park LLC paid $3M ($200K/acre) for the 15 acre Alameda Business Park, 19th Ave. and Happy Valley Rd., Phoenix. Voit Real Estate Services represented the seller and CBRE handled the deal for the buyer of the six vacant, but fully improved industrial parcels. Wells Fargo Bank was the receiver/seller.

Garnett Capital Corporation paid $2.0M ($145/SF) for a 13.5K SF medical office building, 2000 E. Southern Ave., Mesa. The 100 percent leased 2000 Place Medical Plaza was owned by RJ 2000 Southern Avenue Investors, LLC. GPE Commercial Advisors represented the seller, Omni-America, LLC represented by buyer.

DSW Shoes is taking 20K SF in Avondale’s Gateway Pavilions power center. The 302K SF project is northeast of the Loop 101 and I-10 interchange on McDowell Rd. A portion of the complex, reported below, is under shadow of a recently-announced trustee’s sale.

 

Subdivision Lot Packages

Meritage Homes is paying JEN Partners and TerraWest Communities $13M ($56K/lot) for 233 lots. The package includes 74 lots with 90 foot frontages, 63 with 60 foot frontages and 96 with 70 foot frontages. The lots are located at the southwest corner of Queen Creek and Recker roads, Gilbert.

Maracay Homes optioned 138 finished and partially finished lots in the gated Portales community of Palm Valley Phase VIII North, Goodyear, from Rialto Capital. The transaction, which can be worth as much as $10M, has a rolling takedown of the lots—combined with a commitment from Rialto to complete the unfinished homesites. Maracay has exercised a buy closing on six of the lots to start the rolling options. In the package, 57 finished lots have 80 foot frontages and are selling for $70K each. With 70 foot frontages, the remaining 81 lots include 26 finished, priced at $63K each, and 55 partially finished lots being completed by the seller.

Richmond America homes acquired 63 lots in Preserve IV at Dove Mountain, Camino de Oeste and Tangerine Rd., Marana, for $3.4M ($54K/lot). Land Advisors Organization brokered the transaction for seller Miramonte at Dove Mountain Lots 1-130 LLC.

Richmond America homes picked up another 49 finished lots from Regent Properties of Arizona for $2.3M ($47.7K/lot). The package, in the Greer Ranch North community, Reems and Cactus roads, Surprise, follows an August sale of 42 other lots in Phase I to Gehan Homes for $2.4M ($56.7K/lot).

 

Openings

Photo Credit: Northern Colorado Gazette

Natural Grocers by Vitamin Cottage is opening a new store this month, 1915 W. S.R. 89A in Sedona. The organic food chain is adding seven stores to its complement at the same time with other openings in Colorado, Montana, Texas and Nebraska. It already has stores in Prescott and Flagstaff.

Shoe Thrill is opening in the former Urban Tea Loft storefront in downtown Chandler. Featuring European comfort shoes, the specialty retailer, 11 W. Boston St., plans an October 1st opening day. The store’s focus is shoes for professionals on their feet most of the day—nurses and doctors are one segment of interest.

 

Adaptive Reuse

Photo Credit: Ron Medvescek / Arizona Daily Star

In Tucson, the challenge of filling behemoth, abandoned big box retail stores – Circuit City, Ultimate Electronics, Borders, abandoned groceries – is being solved by joining the adaptive reuse movement. Empty retail caverns are subdividing for smaller “big” retailers. The change is one more signal of a returning, but changing, retail economy. A former Circuit City at Oracle and Wetmore roads is being divided for Cost Plus World Market and Jo-Ann Fabric and CraftsAZStarNet reports another Circuit City shell at Broadway and Craycroft Road will soon be subdivided for retail tenants.

In Chandler’s downtown, a former welding garage may be the new Covo Café coffee shop and wine bar. This 2.4K SF historic downtown building, now owned by Peter Sciacca, is across the street from the new Chandler city hall at Arizona Ave. and Chicago St. An opening date has not been set, but the ambience is described as a “Postino’s feel.”

 

Closure & Foreclosure News

Photo Credit: The Republic

The Day’s Inn next for Scottsdale Fashion Square is closing December 1stMacerich is hoping to convert the space into premium retail, such as Barney’s New York, which is just south of the motel. The 44-year old motel has been under a series of one year leases since 2008 when the recession stalled a previous redevelopment plan for the shopping center owner.

Gateway Crossing, 9915 W. McDowell Rd., Avondale, northwest of the Loop 101 and I-10 interchange, has 224K SF falling under a notice of trustee sale on an apparent $50M in debt. The site has 23.3 acres and is anchored by Hobby Lobby, Best Buy and Old Navy.

Photo Credit: Golden Budda

Golden Buddha and Lao Ching Hing Shanghai restaurants in the Chinese Cultural Center, 668 N. 44th St., Phoenix, have both closed leaving only two active eateries—one inside the Ranch Market—in the COFCO Investment Company LLC property. Both restaurants appeared to be struggling financially.

Photo Credit: Michael McNamara/The Republic

Frank-N-Steins, 14071 W. Bell Rd., Surprise, closed after celebrating a first anniversary. The dog, beef and beer fast foot outlet was unable to renegotiate lower rent and weather the summer slowdown. The business has gone into foreclosure. The family-owned business is hoping to reopen in a new location. Skyrocketing rents and the failure of a planned entertainment center to open across the way from the restaurant contributed to its demise.

Photo Credit: MouthBySouthwest.Com

Honey Bear’s BBQ, open since 2004, closed its south Tempe location to retail dining (two Phoenix locations remain open) at Priest and Elliot roads. The space remains open for the delivery and catering businesses.