With the deal done, the JV will spend another $2 million to upgrade the HVAC systems in the eight-building office complex and renovate lobbies. "We're not tearing anything down, but we will be doing a number of cosmetic upgrades," says Todd Gooding, who is chief investment officer of SKB. There are no plans, at this point, to either develop or sell the raw land. The 33-acre development sits between West Dunlap and West Peoria avenues.
"We're focusing, right now, on maximizing the value of each asset," Gooding explains. "Then we'll focus on how to proceed."
Completed between 1975 and 1982, Phoenix Corporate Center is class A and B space. The buildings' tenant roster is made up of GMAC, the ICE Inc., GC Services, Hartford Fire Insurance, US West and Cognizant Technology. Transwestern Commercial Services will handle property management and leasing for the asset, which is hovering 78% occupancy. "We're negotiating with tenants right now for about 30,000 additional sf," Gooding tells GlobeSt.com.
Gooding says the Phoenix Corporate Center transaction is the "fifth or sixth" nationwide for the SKB-Praedium joint venture and the second in Phoenix. In late 2004, the JV teamed on the purchase of all retail pad sites in Metrocenter Mall. "We're continuing to look at doing other deals with them as well," he says. "We've got a great working relationship with them."
While the partnership has nothing under contract in Phoenix at this time, Gooding says the area provides an outstanding market. "Phoenix is on fire," he says. "Activity is as strong in Phoenix as it is in any other West Coast market we acquire property in." The Palmer Group of Sacramento acted as the buyer's consultant.
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