The seller was FR/CAL Ellsworth LLC a subsidiary of Chicago-based First Industrial Realty Trust Inc., which is developing a 270-acre business park on land surrounding the just-sold northeast corner of Ellsworth and Elliot roads. According to Brent R. Moser III with Phoenix-based Grubb & Ellis/BRE Commercial LLC, two other parties also made offers for the property.
Moser says First Industrial opted to go with El Coyote because it could close quickly. "We didn't feel comfortable with a couple of the groups, primarily due to the time needed for an escrow," he says. "This group was able to step in and do a quick turn-around." The Grubb & Ellis team included Michael Sutton, Michael Haenel and Andy Markham.
Richard Rucker, president of Seattle-based Rucker Development Co., who represents the investor's interests, tells GlobeSt.com that the decision was made to buy now because of favorable pricing even though the current development market for the location is unfavorable. "We're kind of in no hurry," he says. "It's pretty obvious the market right now is in turmoil. We're going to sit on the property, leave it in inventory for three to five years."
Also weighing on the immediacy was the use of 1031 exchange funds from a sale in Seattle. "We transplanted some of that money to Phoenix," Rucker confirms.
Rucker says it's possible that land planning will get underway in spring 2009. "But, we're not actively seeking tenants," he adds.
Moser believes the largely undeveloped area around the buyer's property is among the most promising in the entire Phoenix market. "This intersection is poised to be one of the top five to 10 in the metro area," he asserts. "Both roads are major regional arteries for the East Valley. It's right off Loop 202, which was recently completed and opened up this part of the market."
In addition to the First Industrial project, DMB & Associates of Scottsdale, AZ is developing a nearby master-planned community on 3,300 acres. The project includes a resort hotel, golf club, 10,000 to 12,000 residences, a corporate campus and various retail and recreational facilities.
Rucker estimates the retail project ultimately will come in at about 100,000 sf based on 20% land coverage. He says a high-end retail center, probably anchored by an upscale supermarket, would fit well with the other developments planned for the area. "I'm not that familiar Phoenix, but we've driven up and down 202 and haven't run into a real nice high-end center in the vicinity," he says. "Time will tell exactly what would be best. We'll do what the market demands."
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