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PHOENIX-Taking advantage of a growing scarcity of land along Interstate 17, Opus West Corp. has signed a 99-year ground lease with the state of Arizona for 13 acres. The developer plans to break ground in January on the 131,850-sf Northgate Corporate Centre.
"With that location, we think Opus got a great use of the land," says James Bayless, senior vice president with CB Richard Ellis' Phoenix office. He and CBRE senior vice president Ashley Brooks Jr. are preleasing the single-story flex project at the intersection of Interstate 17 and Paradise Lane. The building is scheduled for completion in August 2008. Similar buildings have cost $10 million to $15 million to develop.
Bayless tells GlobeSt.com that the quoted rate is pegged at $16 per sf, triple net, with the space divisible to 20,000 sf. "The building has a parking ratio of 5.6 per 1,000 so we see this as ideal for some kind of a call center or service center or perhaps a school," he says, pointing to the large labor pool that exists in the northwestern submarket.
Bayless says ground-up development costs are increasing for most developers, but the Phoenix-headquartered Opus felt it made sense because it is a ground lease. "Freeway land is getting scarce up there. There's not a lot on I-17 and 101," he adds. "This was an unusual transaction for Opus, but it works for them." The project's architect is Opus Architects & Engineers Inc.
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