TUCSON, AZ (February 21, 2025) -- The office building at 1575 E River Road in Tucson was sold in an investment sale for $2,265,049 ($223 PSF).
The 10,000+ square-foot building was built in 2001 and sold with a double-digit cap rate through 2029. It is fully leased to Tierra Right of Way Services.
The sale was completed on January 9, 2025.
Office investment sales are popular right now for several reasons:
- Post-Pandemic Recovery: After the disruptions caused by the pandemic, many businesses are rethinking their office spaces. With the return to in-person work or hybrid work models, some companies are upgrading or downsizing their offices. Investors see this as an opportunity to capitalize on shifting demands.
- Stability and Cash Flow: Office properties often offer stable, long-term rental income streams. Many office leases are long-term and can offer predictable cash flow, which is appealing to investors seeking stable returns.
- Shift to Hybrid Workspaces: The trend of hybrid work has altered the demand for office spaces. This shift has led to new office configurations, with businesses seeking spaces that support collaboration while allowing remote work flexibility. Investors can capitalize on this by acquiring and transforming spaces that cater to these new trends.
- Growing Demand in Certain Markets: While some markets are experiencing slowdowns in office demand, others—particularly in growing urban areas—are seeing an uptick. This could be due to increased business activity, an influx of talent, or tech company expansions.
- Diversification: Office properties allow investors to diversify their real estate portfolios. With other sectors, like retail or hospitality, facing challenges, office investments are considered a relatively safer bet than other asset classes.
In short, office investment sales are drawing attention because they offer a combination of stability, growth potential, and opportunities for modernization or redevelopment that align with current market trends.
Rick Kleiner and Alexis Corona with Cushman & Wakefield | PICOR represented the seller, RABB Investments, which is based in Oro-Valley. Kyle Kilgore with NAI Horizon, Tucson, represented the buyer, Alex Madkour, a real estate broker from the state of Washington.
For more information on this sale and office investment in general, Kleiner can be reached at 520.546.2745, and Corona is at 520.748.7100.
To learn more, subscribers should refer to RED Comp #11704.