221,881-SF Back Office Yields Nearly $31M

TEMPE, AZ-Greenstreet Real Estate Partners LP has beat five other offers with a $30.3-million bid to add the 221,881-sf Tempe One Business Center to its portfolio. At sale time, the asset was 30% leased.

Argus Realty Investors of San Clemente, CA acquired the building at 1516 W. 17th St. four years ago for $23.7 million. “This was a good return on investment for Argus and Greenstreet gets a nice asset they think will increase in value,” says Tom Adelson, executive vice president in Phoenix with CB Richard Ellis. He and CBRE senior vice president Kevin Calihan and executive vice presidents Jim Fijan and Jerry Roberts represented the tenants-in-common seller.

Greenstreet Partners ended up with the 28-year-old asset because of its access to cash during the credit market crunch, Adelson says. He adds the buyer also was aggressive when it came to due diligence and quickly put up non-refundable earnest money.

Adelson tells GlobeSt.com that Tempe One has one tenant, Ikon Office Solutions, which has a 70,000-sf long-term lease. “We have two deals we’re pursuing, one for about 30,000 sf and the other at around 50,000 sf,” he adds. “The activity on this has been very good.” CBRE, which holds the leasing assignment, is quoting $15 per sf, triple net, for the space.

Adelson goes on to say there are several reasons that interest in the building has picked up: it’s furnished and its parking ratio of 6:1,000 sf is ideal for a call center. Tempe One Business Center’s plug n’ play state is thanks to Chase Bank, which moved out about five years ago, according to Adelson. More recently, its tenants were the University of Phoenix’s online division and Kronos Inc.

Adelson says Greenstreet Partners plans to make some minor upgrades. The to-do list includes painting the exterior, resurfacing the parking lot and adding windows.