21,920-SF Uptown Renewals Get Signoffs

PHOENIX-Two office tenants have leased space along Central Avenue in uptown Phoenix, an area that has been lagging in demand.

The Arizona Board of Regents is renewing its 13,470-sf spot in Park Central Square, an office tower at 2020 N. Central Ave. in the city’s uptown area. The Board of Regents, which oversees Arizona’s public universities, signed a six-year lease, valued at more than $1.5 million.

The Arizona Municipal Water Users Association also has inked a 10-year renewal for its 8,450-sf office at 4041 Central Plaza, an office building at 4041 N. Central Ave. The pact is valued at more than $1 million.

During the past several years, uptown has slipped while other areas–Camelback Corridor, north Scottsdale, Interstate 17 Corridor, downtown Phoenix and around 44th Street near Sky Harbor Airport–have experienced strong office demand. During the first quarter, the uptown area had more negative absorption of any submarket in the Valley, losing more than 122,000 sf in office leases. The vacancy rate now stands at approximately 15% and lease rates for class-A office space is riding around $21 per sf in comparison to the average of $24 per sf. Therefore, the uptown area is attracting a slew of thriftier tenants, including a number of governmental agencies and non-profit associations.

The Phoenix office of Insignia/ESG, with brokers Don Mudd and John Bonnell, have represented the Arizona Board of Regents and broker Jerry Roberts of CB Richard Ellis’ Phoenix office has acted for building owner, Jackson National Life Insurance Co. In the Arizona Municipal Water Users Association lease, Mudd and Bonnell have represented building owner, New York-based SSR Realty Advisors Inc. while the association had no tenant rep.