Parkway Properties Takes Tempe’s Hayden Ferry Lakeside II for $86M
- Feb 15, 2012
February 15, 2012
By Nicholas Ziegler, News Editor
The 12-story, Class A Hayden Ferry Lakeside II office building has just sold for $86 million to an affiliate of Parkway Properties Inc., which also owns the adjacent Hayden Ferry Lakeside I building. The property was purchased from an undisclosed seller.
“The exceptional leasing success at Hayden Ferry I made this a natural acquisition,” Jim Fijan, executive vice president with CBRE, said. “I believe Hayden Ferry Lakeside II is a great compliment to Parkway’s neighboring asset.” CBRE Group Inc. represented Parkway in the transaction.
As of March 2011, the building was owned by New York-based Sumitomo Corp. of America, which had acquired the property in 2008 from developer SunCor for $92.5 million. The Lakeside II building is located in a mixed-use project with an aggregate 1.6 million square feet of office, residential and retail space amid pedestrian and open space along Tempe Towne Lake. Lakeside II was 95 percent leased at the time of sale and counts MetLife and KPMG among its tenants.
“The Phoenix office-leasing market has turned and is gaining momentum,” Kevin Shannon, managing director with CBRE, said. “It was one of only eight office markets nationally that absorbed over 1.8 million square feet in 2011, with much of that absorption focused in Class A office assets like Hayden Ferry Lakeside. This transaction again demonstrated capital’s continued desire for core office product.”
Other reports corroborate Shannon’s sentiments. A January 2012 outlook from NAI Horizon noted that, “though conditions remain weak, 2011 saw an increase in in-migration population and new job creation, creating optimism and improvement in the (office) sector.” Vacancy rates for the Phoenix office market dropped to 20.7 percent in the fourth quarter of 2011 from the previous quarter’s 21.5 percent.
“At the close of 2011,” NAI Horizon noted, “experts expect that commercial real estate will accelerate more. Various worldwide factors can change predictions in an instant; however, better times are expected in 2012.”