PHOENIX—Mill Avenue Office, L.L.C. (owned by Bob Parsons) has acquired Hayden Station, a 107,508-square-foot, mixed-use office and retail property located on the southwest corner of Mill Avenue and 3rd Street, for $26.5 million ($246.49 per square foot). The seller was Tucson-based Holualoa Companies.
Senior managing directors Bob Buckley, Tracy Cartledge and Steve Lindley with Cassidy Turley's capital markets group and Jeff Hartland, Scott Boardman, Trevor Klinkhamer and Brent Mallonee with Cassidy Turley's office and retail groups brokered the transaction on behalf of the buyer and the seller.
“The seller had gotten to 97% occupied,” Lindley tells GlobeSt.com. “The Tempe market has been on fire. Two years ago the area had a 73% occupancy rate; today it's at 96%. Over that time asking rents grew 15%. This is the Valley's strongest performing submarket and there's a lot more room to go.”
Built in 1986, Hayden Station (formally Hayden Square), includes five buildings: 310,350,404 and 410 S. Mill Avenue and 51 W. 3rd Street. The four Mill Avenue buildings are all two-story and range in size from 5,642 to 9,548 square feet. The 3rd Street building is a five story, 74,307 square feet multi-tenant office building. The entire project was 97.9% leased at the time of sale.
“Urban, infill properties in true walkable, 24/7 locations are generating exceptional investor interest,” Lindley says. “We were able to take advantage of this interest with Hayden Station's Mill Avenue address in Downtown Tempe right at the light rail station. Capital markets love walkable areas, we had multiple offers for this truly irreplaceable location.”
Hayden Station is strategically located on Mill Avenue, adjacent to a Light Rail station and within a short walk to Arizona State University. Downtown Tempe is one of Arizona's most supply-constrained and successful office markets, with the Tempe North submarket recording the lowest overall vacancy in the Valley in the first quarter of 2014, at 8.4%.
“Hayden Station has had a history of maintaining high occupancy, even during the recent downturn,” according to Stan Shafer, chief operating officer for Holualoa Companies. “Downtown Tempe is now the strongest office market in the Phoenix Metro.”
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