TEMPE, AZ-In a submarket where office vacancy exceeds 26%, Hayden Ferry Lakeside Phase II is outperforming the market. Five new leases have brought the 12-story, class A office building’s occupancy to more than 90%.
In the past nine months, the 300,000-square-foot Hayden Ferry Lakeside Phase II has leased about 67,000 square feet. Among the new leases are deals with Microsoft Corp. and Citrix Systems Inc.
“Tenants see an opportunity to take advantage of current market conditions to upgrade their space in the Phoenix metro market,” says Bryan Taute of CBRE’s Phoenix office. He and Brad Anderson represented the building owner, New York City-based Sumitomo Corp. of America, in lease negotiations.
“The tenants that are stable and confident in how much space they need are making deals in newer buildings,” Taute explains, pointing out that the region recorded 900,000 square feet of positive absorption for class A office space, while losing tenants in class B and class C properties.
Taute tells GlobeSt.com that rental rates have decreased significantly across the Tempe submarket, leading tenants to relocate to higher quality buildings. “The rates at Hayden Ferry Lakeside Phase II were in the mid-$30s at the peak, and now they’re in the mid to high-$20s,” he notes. “Even though most of our market is in the high teens to low $20s, tenants consider us a good value.”
Microsoft signed a lease for 23,535 square feet on the building’s top floor. Wally Hale and Todd Linde of Jones Lang LaSalle in Phoenix represented the tenant, which moved from Phoenix Plaza, located in Central Phoenix.
Citrix Systems Inc., of Goleta, CA, leased 19,919 square feet and will expand its office when it moves from Fountainhead Corporate Center in Tempe in May 2011. Don Rodie of Cushman & Wakefield in Phoenix represented the tenant.
In addition, Guardian Life Insurance Company, based in New York City, leased 8,092 square feet, while Ronald Blue & Company of Roswell, GA, took 7,842 square feet, and Solium Capital LLC, of Southfield, MI., signed a lease for 6,740 square feet.
“The tenants that have relocated were looking for a vibrant environment that would attract employees and fit their corporate images,” Taute says.
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