"Meritage decided that they needed everyone under one roof and wanted to have a design center as well," says Tom Adelson of CB Richard Ellis Inc.'s Phoenix office. The Phoenix-based Furst agreed to house a Meritage subsidiary in temporary space until the Perimeter office building delivers at 17851 N. 85th St. The overall package is valued at $9 million over the eight-year term.

Adelson says the deal evolved from Meritage's acquisition of Monterey Homes, which grew out of a previous merger with Hancock Communities. He tells GlobeSt.com that the deal was very complicated because of lease expirations. "A lease buy-out just didn't make sense economically...a yet-to-be-built building made more sense," he says.

Meritage currently occupies about 3,000 sf at 8501 E. Princess Dr., where Hancock Communities also leases 17,000 sf. Monterey Homes occupies 10,000 sf at 6613 N. Scottsdale Rd. Meritage's and Hancock's leases do not expire until early 2006, but Monterey Homes' pact expires this year. As part of the deal, Furst Properties carved out temporary space for Monterey Homes, plus space for a design center, in an existing building at Pinnacle at Kierland.