David Maltzman of Beverly Hills acquired a 95%-occupied retail center on 7.8 acres at 9699 N. Hayden Rd. According to Joseph Compagno, associate director of Marcus & Millichap Real Estate Investment Services, who represented both sides of the transaction, the project had been anchored by a Wild Oats market, but the store was closed down when it was acquired by Whole Foods, which already had an operation in Scottsdale. The space was subsequently leased to New Vision Spiritual Growth Center, which took 14,000 sf, and Salon Boutique, a small chain of spa treatment centers, which opened in 11,358 sf.
In addition to the church and spa, the center is tenanted by a mix of mostly local shops and restaurants. But as Compagno points out, the absence of national tenants is countered by a location in the midst of a very high-income community. Mountain View Plaza is situated between Gainey Ranch Golf Club and Starfire at Scottsdale Country Club plus there are five other golf or country clubs within three miles. The broker says annual retail rents in the area average $25 per sf to $30 per sf.
Mountain View Plaza was sold by another private investor, James Kaufman of Phoenix. He owned the property eight years during which time it had shown significant appreciation.
Compagno brought the two parties together in an off-market transaction. He says the buyer, who owns one other property in the Phoenix market, was looking for a 1031 exchange opportunity and wanted to find a property in or around Scottsdale because of its demographic profile and prospects for rising values."He sees this as a longer term hold for his portfolio," Compagno tells GlobeSt.com. "He plans to raise the rental rates as leases turn and improve the value over time."
According to Compagno, transaction velocity in the area has slowed from last year, but investor interest in Scottsdale remains strong. "There's not a whole lot of product that trades in the city because owners like to hold onto what they have," he says. "Scottsdale retail properties tend to generate solid returns for their owners so they only sell when the investments have fully matured."
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