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RREEF Grabs $6.5 Mil in Southgate Commerce Park Sale

CHANDLER, AZ-RREEF, acting on behalf of a San Francisco pension fund, has negotiated a $6.5-million sale of the 113,200-sf Southgate Commerce Park in Chandler. The submarket's land is at a premium so the buy is being touted as a "good value.

By D.J. Burrough | Updated on September 10, 2001

CHANDLER, AZ-The 113,200-sf Southgate Commerce Park in Chandler has brought $6.5 million in a sale to International Capital Partners LLC of Scottsdale. Seller SFERS Real Corp. M, a San Francisco-based investment company, has realized $57.42 per sf in the sale of the multi-tenant buildings situated at 110-112 S. Weber Dr. and 7419 W. Boston St.

The land cost in the fast-growing suburb of Chandler has risen so dramatically in the past few years that it would be difficult, if not impossible, to develop a multi-tenant industrial project and still offer rents anywhere near the going rate, Pat Feeney, a broker in the Phoenix office of CB Richard Ellis, tells GlobeSt.com. “Land values have gone up,” he says. “To buy land and build from the ground up, the lease rates would be off the charts. The rental rates to justify the development of that would be probably 25% to 30% higher than existing rates.”

As long as the occupancy rate remains in the 90% range in the Chandler area, expect that rents will continue to rise, says Feeney. “It’s a good value,” he adds.

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