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PHOENIX-With plans to redevelopment the property into office condominiums, Minneapolis-based GeGe LLC has paid $8.6 million for Arizona Lifestyles Gallery in an off-market sale for a prime piece of infill real estate.
The 125,000-sf retail showroom was sold by a partnership between Phoenix-based Westcor Development, a subsidiary of the Los Angeles-based Macerich Co., and Kansas City Life Insurance Co. The sale includes two ground leases for the 10-acre development at 4868 E. Cactus Rd.
"There was a market shift where all the furniture and home decor retailers moved from this location to North Scottsdale," says Cam Stanton, a first vice president with CB Richard Ellis Inc. "It's a bad retail location because it has poor visibility." The 23-year-old Arizona Lifestyles Gallery was 55% occupied at sale time.
Stanton tells GlobeSt.com that the deal took nearly 12 months to close because Westcor and Kansas City Life had to convert their ownership to a TIC entity to sell the property. "This property never went to market because GeGe showed interest from the very beginning," says Stanton, who teamed with CBRE's Joe Porter, Pat Feeney and Dan Calihan to broker the sale.
According to Stanton, Arizona Lifestyles Gallery is ripe for redevelopment into office condos. "It's a strong infill location close to the freeways and almost adjacent to Paradise Valley Mall," he explains, adding the plan is still being finalized. The redevelopment, though, is likely to begin this year.
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