"The Esplanade is as good as it gets in Phoenix," says Stephen G. Hearn, president of the 30-year-old development, management and investment firm. "It's the highest-profile asset we've ever acquired…It's a true trophy in a city we really like."
The class A trophy, located at 2415 E. Camelback Rd., is Hearn's second acquisition in the Phoenix metro area. In 2000, the company acquired Tempe City Center for $19.1 million.
Built in 1997, Esplanade III sits on 1.1 acres within the Camelback Esplanade, a mixed-use complex that includes more than one million sf of office space in the heart of the Valley's financial district. The building is connected to the 11-story, 281-room Ritz-Carlton Hotel, a 14-screen, two-story AMC theater and numerous restaurants and shops.Esplanade III is just west of Donald Trump's proposed condominium, hotel and retail tower, now under review by the city. It also is close to the Arizona Biltmore Resort and its two championship 18-hole golf courses.
Hearn tells GlobeSt.com that Esplanade III attracted offers from institutions, fund managers and REITs across the country. "We were the only entrepreneurial company in the final bidding" he says. Christopher Toci, Jerry Jacobs and Larry Downey, all senior directors with Cushman & Wakefield of Arizona Inc., represented the seller.
Hearn Co. also was the only buyer planning to put any debt on the property. Nonetheless, the company was able to close the deal in less than 30 days. Working with Steve Posluszny of GMAC Commercial Mortgage's Phoenix office, the company got a $40-million, short-term mortgage from Nationwide Life Insurance Co. "It was the first time for us to work with Nationwide." Hearn says, "and there aren't too many lenders who would have been able to digest a deal this size so quickly like they were able to."
The Esplanade III is 65% occupied. The roster includes Chicago Title & Trust and CB Richard Ellis Inc. The C&W team of Jacobs and Downey will lease the asset for Hearn.
"The play for us is to fill it up and do it quickly," Hearn says. The building is renting in the high $20 range.
Hearn says he is shopping for more properties in the Valley. The company is focused on investing in "youthful cities"--ones creating new-economy jobs while offering a superior and balanced lifestyle.
John T. Roselli with the Chicago law firm of Fuchs & Roselli Ltd. provided legal counsel to the Hearn Co. for the Esplanade III acquisition. The buy side was brokered by Philip J. Marino, a principal with Phoenix-based Intercon West Realty Advisors LLC.
The Hearn Co., celebrating its 30th anniversary this year, provides investment, development, management, leasing and construction services for its nearly 1.9 million sf portfolio of office properties. In addition to the Arizona assets, it owns properties in Chicago; Evanston, IL; St. Paul, MN and San Diego.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
