"We are so happy with this deal," says Jean Murphy, acquisitions officer with Argus Realty. "They're awesome properties." Argus Realty paid $23.2 for Red Mountain Corporate Center at 4801 E. Washington St. and $27.8 million for Black Canyon Commerce Park at 2101, 2133 and 2225 W. Peoria Ave.
"We see Phoenix as a great value for our investors," Murphy tells GlobeSt.com. "We plan at least an eight-year hold for Red Mountain and Black Canyon." The properties traded at a cap rate in the 8% range. Warren Johnston with Cushman & Wakefield of Arizona Inc. held the listing.
Murphy says Argus Realty cut a deal when Red Mountain Corporate Center fell out of escrow. "We stepped in to get both," she adds. The 132,221-sf center consists of a two-story office building and a single-story retail structure on 11.8 acres.
According to Murphy, Red Mountain was constructed in 1999 as a build-to-suit for First American Title Insurance Co. The title company occupies 85,000 sf on a lease that rolls in four years. The 98%-leased complex has seven other tenants including ParsonsTransportation, Tetra Tech and Future Electronics. Brookwood purchased the property in 2001.
The 16-acre Black Canyon Commerce Park brought $4.8 million more than Brookwood paid in July 2002. The 181,629-sf, three-building park is fully occupied by five tenants: Insurers Administrative Corp., Allied International Credit, Matrix Financial Services and Pinnacle West Capital Corp.
"Most of the leases don't roll until 2009 or 2010," Murphy says, noting Johnston will continue to handle leasing. Argus Realty has tapped Kitchell Development Co. to oversee property management.
Argus Realty obtained a $40-million loan from Atlanta-based Column Financial Inc. to acquire the assets. The eight-year loan, which is interest only for the first five years, has a fixed-rate interest of 5.3%, according to Murphy.
Since February 2004, San Juan Capistrano, CA-based Argus Realty has spent $107.6 million on Phoenix acquisitions. Its other properties are the 216,000-sf, two-building Tempe One Business Center at 1516 W. 17th St. and 200,000-sf, class A Elliot Corporate Center at 875 Elliot Rd., both in Tempe.
The sale reduces Brookwood to one asset in the Valley, the Brookwood Commerce Center. The 202,040-sf, four-story office and retail property is located at 4425 W. Olive Ave. in nearby Glendale.
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