"There are virtually no vacancies in Litchfield Park. It's an unusual situation in the Phoenix market," Insignia/ESG managing director Trevor Klinkhamer tells GlobeSt.com of the small but growing community about 45 minutes west of downtown Phoenix. "Litchfield is the only place in Phoenix metro area that is undersupplied."
That lack of office space bodes well for investors like Kathy and Randy High of Modesto CA, who picked up the five-building, 23,691-sf Litchfield Park Phase I office park for its full $2.5-million asking price in a 1031 Exchange.
Built by SunCor in 1980, the 501-555 East Plaza Circle Dr. office complex is fully rented by a variety of business tenants with leases extending from two to five years. With few other office buildings in the area and lease rates hovering at $18 per sf, well below the $22 per sf to $24 per sf demanded by newer construction, the property has a waiting list of prospective tenants eager to move in, Klinkhamer said.
"It's a very strong market there," Klinkhamer noted. "There's virtually no other older office product out there."
The strength of Litchfield Park's office market was what attracted the California investors to the property, which had two contracts fall out of escrow due to financing issues. "They realized it's a very tight market and have experience owning properties in rapidly growing areas of California. They understood that rents are eventually going to go up and felt very comfortable with the complex," Klinkhamer said, adding that the couple also felt comfortable enough with Insignia/ESG's property management to retain the team as their leasing agents and managers.
The deal was put together by Klinkhamer and Insignia/ESG associate director Ray Harris, who represented the seller, Romar Investors LLC, in the transaction. The buyer was represented by John Garvey, an independent realtor from Phoenix.
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