Lowe JV Buys 2 Class A Office Buildings in Phoenix for $51M
- Dec 30, 2013
Frequent partners Lowe Enterprises and J.P. Morgan Asset Management have joined forces on the acquisition of a two-building, 327,300-square-foot office portfolio in metropolitan Phoenix. The partnership acquired the Class A office properties from CJK Investments for an aggregate $51 million.
What a difference three years make. It was in 2010 when the buildings, 5090 N. 40th St. in Phoenix and Scottsdale Financial Center in Scottsdale, last traded in separate CJK purchase transactions totaling approximately $13.3 million and $15.5 million, respectively
This time around, Lowe and J.P. Morgan picked up the 175,200-square-foot 5090 40th St. for $26.3 million. Developed in 1988 in Phoenix’s Camelback Corridor, the four-story property’s sizeable vacancy–it’s presently 54 percent leased–provides the new owners with the freedom to fill up the empty space at current market rates. Scottsdale Financial Center III, however, located at 7272 E. Indian School Rd. in Scottsdale, comes with a tenant roster that is 93 percent full. Also built in 1988, and renovated in 2012, the five-story office destination features 152,100 square feet of space and carried a price tag of approximately $24.7 million.
Commercial real estate services firm CBRE Group Inc. marketed the properties on the seller’s behalf to what was an eager investment community that, undoubtedly, was attracted to the offer for the same reasons as Lowe. “These buildings offer the opportunity to acquire well-located, well-maintained properties in markets that will continue to benefit from improving economic conditions,” Rick Newman, CEO, Lowe Enterprises Real Estate Group, said in a prepared statement.
Indeed, Arizona’s economy as a whole is on the upswing. As CBRE notes in a third quarter report, University of Arizona economists anticipate that gains in jobs, income, population and retail sales in 2013 will pick up in pace in 2014 and 2015.
The Phoenix portfolio purchase comes just a few months after Lowe and J.P. Morgan announced news regarding another joint venture endeavor. In September the partners, teaming with Megatoys, commenced construction of a 320-unit apartment project in downtown Los Angeles.