Griffin Capital Snags Recently Completed Phoenix Office Asset

The 271,000-square-foot complex was built-to-suit for the McKesson Corp. last year, with the healthcare company’s lease expiring in 2028.
McKesson Scottsdale Campus in Scottsdale, Ariz.
McKesson Scottsdale Campus in Scottsdale, Ariz.

Working on behalf of the Griffin Capital Essential Asset REIT, Griffin Capital Co. has acquired the McKesson Scottsdale Campus from Ryan Companies US Inc. The pair of two-story, Class A office buildings in Scottsdale, Ariz., changed hands for $67 million. Cushman & Wakefield’s Chris Toci, Chad Littell, Greg Mayer and Jim Wilson represented the seller in the transaction.

The deal was done with 1031 exchange proceeds from the disposition of DreamWorks Animation’s Headquarters and Studio Campus, which the REIT sold last November for $290 million.

Strategic location

The property is located at 5601 N. Pima Road. The seller developed the 271,000-square-foot campus as a build-to-suit for the McKesson Corp. The healthcare company is at the start of a 10-year lease, with an expiration date of February 2028.

“We are pleased to acquire this newly built facility leased to a leading global healthcare company with over 150 years of operating history and $199 billion in revenue in 2017,” Louis Sohn, Griffin Capital’s managing director of acquisitions, said in a prepared release. “The property provides a unique opportunity to acquire a long-term leased asset situated on one of the last remaining commercially developable parcels in the in-fill South Scottsdale submarket.”

Sohn pointed to several reasons why the deal makes sense for the REIT’s portfolio, including having a global leader in the healthcare industry as a tenant, its prime location between the cities of Scottsdale and Tempe, and the access it provides to the heavily traveled 101 Loop.

“We are very familiar with the Phoenix MSA and believe we acquired a well-located asset at an attractive basis, due to its ideal location, which not only offers access to numerous retail amenities and the Greater Phoenix area, but a diverse and skilled labor force, as well,” Michael Escalante, Griffin Capital’s chief investment officer, said.

A hot market

The office market in Scottsdale has been incredibly strong over the last year. In January, Transwestern Investment Group sold Lincoln Towne Centre, a 226,358-square-foot Arizona office complex to GLL Real Estate Partners. Last year, EverWest Real Estate Partners delivered the first phase of The Quad, the redevelopment of a 14-building office park in Scottsdale, one of the largest Phoenix office completions of 2017.

Image courtesy of Griffin Capital Co.