Cole Purchases $102M PetSmart HQ in Phoenix
- Aug 25, 2011
August 25, 2011
By Nicholas Ziegler, News Editor
The Phoenix office market continues its march back to recovery, this time led by the $102.5 million purchase of the PetSmart corporate headquarters by Cole Real Estate Investments. The firm, fresh off a $76 million acquisition in Atlanta last month and what was then one of the largest single-tenant transactions in Arizona, the $170 million sale-leaseback of the University of Phoenix office complex, will now own the three mid-rise-office-tower campus.
The facility, totaling 356,000 square feet, was built in 1997 and renovated in 2008. “This acquisition is a perfect fit with Cole’s core investment strategy of acquiring high-quality commercial real estate leased long-term to creditworthy, industry-leading businesses,” Thomas W. Roberts, executive vice president and head of real estate investments for Cole, said. “As a strategic location for PetSmart, this corporate campus is an excellent asset to add to our growing portfolio of corporate real estate.”
A report by Cushman & Wakefield revealed that the Phoenix market, while perking up, is still under some stress. Leasing activity in the office sector has shown positive absorption in the first six months of 2011 and, as large deals such as Cole’s indicates, market fundamentals are expected to continue to improve. Moody’s is projecting employment growth in excess of 65,000 jobs for the Phoenix market in 2012.
CB Richard Ellis arranged the sale to Cole on behalf of institutional investors advised by Prudential Real Estate Investors. Cole-related entities now own and manage more than 3.2 million square feet of commercial properties in Arizona.