U-Haul Acquires Phoenix Office Tower
The largest owner/occupier office sale in the Southwest since early in the pandemic has closed.
U-Haul has paid $23.7 million for 20 E. Thomas Road in Phoenix, Arizona’s third tallest office tower. An entity controlled by Bank of America sold the 548,938-square-foot asset in a deal brokered by Cushman & Wakefield and Kidder Mathews. The sale also included a 1.1-acre land parcel for additional parking.
The previous owner, LBA Realty, had purchased the high-rise in 2006 for $76.3 million, according to CommercialEdge information. This June, several months after leases comprising more than two thirds of the building expired, the Bank of America entity foreclosed on the property that was encumbered by a $62 million loan originated in 2016.
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U-Haul will use the building to expand its corporate campus in Midtown. About 16 percent of the tower will remain leased to existing tenants, while the moving and self-storage company will occupy the rest.
The 25-story high-rise came online in 1988 and includes about 1,500 square feet of first-floor retail space. The building has floorplates averaging 23,000 square feet, a conference and training center, along with about 1,230 parking spaces.
The transit-oriented tower is some 2 miles from downtown Phoenix and less than 1 mile from U-Haul’s headquarters at 2727 N. Central Ave. The property is part of the 11-acre mixed-use development dubbed Phoenix Plaza, comprising 1.5 million square feet of office space, 30,500 square feet of retail, a 242-key hotel and an 11-story parking garage.
Cushman & Wakefield Executive Managing Directors Eric Wichterman and Chris Toci, as well as Managing Director Mike Coover, represented the seller, while Executive Managing Director Jerry Roberts and Managing Director Pat Boyle provided leasing advisory. Kidder Mathews Senior Vice President Ryan Eustice worked on behalf of U-Haul.
Phoenix office sales remain steady
Phoenix’s office investment volume year-to-date as of October reached $1 billion, according to a recent CommercialEdge office report. Assets in the metro traded for $164 per square foot on average, below the $177 national figure. Meanwhile, the Valley’s vacancy rate registered a 60-basis-point decrease year-over-year, clocking in at 18.4 percent in October.
In the metro’s largest office deal of the year, Wide Open Excursions acquired a 306,877-square-foot tower for $97.9 million. Hines sold the Class A asset that came online in 2009.
Other notable transactions included Net Lease Office Properties’ sale of a 354,000-square-foot office building for $71.5 million. The property had previously changed for nearly $40 million in 2000.
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