Andrew White, senior vice president in the Yardley, PA-based buyer's Los Angeles office, says the Scottsdale Financial Center I at 4110 N. Scottsdale Rd. offered a perfect storm from the investment side. "It's about 75% leased so there's some value-add by leasing up the property," he says. "It was built in 1986 so there are some great opportunities to upgrade the building and bring it up to the standard that is commensurate with its outstanding location."
White tells GlobeSt.com that BPG will invest an additional $3 million to upgrade landscaping, common areas, lobbies and security and HVAC systems. The company's underwriting requirements call for a five-year hold.
White says BPG has been looking for all product types in a variety of markets, but Phoenix has been a somewhat difficult market in recent months, however. "It's been hard to find product that meets our criteria because there continues to be a gap between seller and buying pricing," he acknowledges.
But, White says there was no such gap with Scottsdale Financial Center I. "We negotiated a price we thought appropriate, given the level of physical upgrade needed and the vacancy," he adds.
Jim Fijan and Jerry Roberts in CB Richard Ellis' Phoenix office marketed the property for the Newport Beach, CA-based seller. BPG has used in-house representation to broker its side of the deal.
Once the transaction closes, KBS will have sold three assets from a five-property portfolio acquired from Scottsdale-based Denali National Trust Inc. in 1998. In recent weeks, KBS sold the 80,067-sf Mesa Executive Park at 1255 W. Baseline Rd. in Mesa and 173,338-sf Camelwest Plaza at 1951 and 2001 W. Camelback Rd. in Phoenix. The 100,670-sf Scottsdale Airpark Corporate Center at 15020-150 N. Hayden Rd. and 63,639-sf Paragon Plaza at 3131 E. Camelback Rd., both in Phoenix, are under contract.
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