PHOENIX—Equus Capital Partners, Ltd. sold Lincoln Towne Centre, a two building property totaling 226,112 square feet located at 4150-4250 N. Drinkwater Boulevard in downtown Scottsdale, to Transwestern Strategic Partners on behalf of its TSP Value and Income Fund for $58.85 million. Transwestern Strategic Partners is the discretionary investment management arm of Transwestern Investment Group based in Dallas.
Situated at the intersection of Drinkwater Boulevard and Indian School Road, Lincoln Towne Center provides easy access to the Loop 101 and is directly across from the Scottsdale City Hall. It is also in close proximity to the nearly two million square foot Scottsdale Fashion Square, the Scottsdale Waterfront development and the W Hotel, providing a 24/7 environment within walking distance to numerous retail amenities, restaurants, hotels and condo and apartment homes. The property also features a rare, four-level subterranean parking structure allowing for a parking ratio of 4.1 spaces per 1,000 square feet. Nearly half of the property is occupied by investment grade tenants including CNA, Catlin and EMC2.
Chris Toci, Chad Littell, Jerry Noble, Pat Devine and Greg Mayer of Cushman & Wakefield of Arizona represented the seller in the disposition.
Toci tells GlobeSt.com, “This asset saw twice the amount of activity due to its location. There was a lot of depth in the bidding process. The buyer was drawn to the walkability of the area—the retail, the nightlife, restaurants, Fashion Square, luxury residents and the tech vibe in the area. The Old Town submarket is at an inflection point because there is no available land left, so we will see rents rise. The submarket is emerging as a tech hub because office space is still less expensive than San Jose, New York or Denver and residing here is less expensive also. The location, with its proximity to ASU, has the ability to attract millennials and that makes it a great incubator for a higher level of knowledge-based workers.”
The acquisition of Lincoln Towne Centre in February 2012 was the first asset acquired by Equus Capital Partners on behalf of its value-add fund, BPG Investment Partnership IX, L.P. “Lincoln Towne Centre was a classic value-add office investment for our firm,” says Jonathan Praw, vice president and head of West Coast Operations for Equus Capital Partners, Ltd. “When we acquired the complex it was just 67% leased while the submarket vacancy rate was in the mid-20% range. We were able to quickly improve occupancy to 99% at the time of sale and benefited from the 30% increase in Downtown Scottsdale rental rates. Tenants wanted to take advantage of the live, work, play atmosphere that the area has to offer—all the amenities of Old Town. The market is really tightening up.” Praw oversaw the acquisition, reposition, and disposition efforts.
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