PHOENIX-A summer 2007 merger between two communications services providers has resulted in a seven-year, 50,000-sf expansion lease. Integra Telecom Inc., headquartered in Portland, OR, has taken the space at the 86,835-sf South Mountain Center at a consideration in excess of $4.5 million.
Integra Telecom, which acquired Eschelon Telecom Inc. of Minneapolis, will move into its new space at 3540 E. Baseline Rd. on Jan. 1. According to Blake Hastings, VP with Grubb & Ellis BRE/Commercial LLC's Phoenix office, Eschelon Telecom is in 15,000 sf at 2600 N. Central Ave. in the CBD. The merger, however, has meant the need for more space.
“Integra had looked for about a month, and were considering a couple of subleases in addition to this,” says Hastings, who brokered the transaction between the tenant and building owner Equastone of La Jolla, CA. He says that Integra was looking for an inexpensive, long-term deal, which is why South Mountain Center was selected.
“With the recent merger, they didn't want to over-saturate their books with rent payments,” Hastings explains. “This is a good-quality, class B flex building.” Hastings says the lease pushes the building's occupancy to 60%, and no other tenants are in hand at this time.
Hastings tells GlobeSt.com that the building, which was once called Raven Corporate Center, was acquired in late 2005 by Equastone. The asset on the city's southwest side was built in 2001 by the local division of Minneapolis-based Ryan Cos. However, “leasing didn't go quite as well as planned, so they sold to Equastone,” Hastings says.
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