Phoenix, Arizona – CBRE has completed the sale of a 175,835-square-feet, class A office building in the Camelback Corridor area of Phoenix. Located at 5090 N. 40^th Street, the building commanded a sale price of $42.6 million, or approximately $242 per square foot.

Jim Fijan and Will Mast with CBRE’s Phoenix office negotiated the transaction. The seller was a joint venture between Lowe Enterprises and J.P Morgan Asset Management of Los Angeles, Calif. The buyer was Vancouver, BC, Canada-based City Office REIT, Inc.

The seller originally purchased the property as part of a portfolio in December 2013. At the time, the property was approximately 50 percent leased. Over the past 3 years, the seller instituted a capital improvement plan, investing millions into the building, as well as an aggressive marketing and leasing program, bringing the property to just over 90 percent leased at time of sale.

“The Camelback Corridor has always been one of the strongest employment corridors in the Valley, and 5090’s tenancy reflects that,” said CBRE’s Fijan. “Currently, the property is home to major corporate employers, including Bar-S-Foods, Kudelski Group and Beyond Trust Software, among others.”

Fijan also points to the submarket’s overall health as a positive indicator for the Valley’s office market.

“The Camelback Corridor has enjoyed a resurgence in 2016.  As one of the top performing submarkets in all of metro Phoenix in terms of net absorption, the Corridor’s class A vacancy rate currently sits at 16.3 percent – a huge improvement from the 21.6 percent of a year ago.”

Located in the heart of the Camelback Corridor, 5090 N. 40^th is strategically located, offering quick, easy access to Arizona Highway 51 and the Loop 202 Freeway. Sky Harbor International Airport is just 6.7 miles away, and Arizona State University is less than 10 miles away.

CBRE’s Jerry Roberts, Corey Hawley and Pat Boyle have been retained to market and lease the property.

Local Real Estate Trust Drawn By Long-Term Corporate Lease

Phoenix, Arizona – The corporate headquarters of Avnet, Inc. has been sold to Cole Office & Industrial REIT (CCIT II), Inc. of Phoenix.  The Class A, 176,402-square-foot building at 2211 S. 47^th Street in Phoenix has been the technology company’s worldwide headquarters since 1997.

The property commanded a $32 million sale price.

“This signature property provided an opportunity to acquire a global corporate headquarters with a long-term, investment grade tenant,” says Mindy Korth, executive vice president with Colliers International in Greater Phoenix.  “The building is located in a highly sought-after area near Sky Harbor International Airport.”

Korth and Kirk Kuller of Colliers International negotiated the sale transaction on behalf of an affiliate of Lexington Realty Trust of New York, NY.

The Avnet Global Headquarters building is situated within the Phoenix Airport Center, an 85-acre corporate business park located at University Drive and State Route 143.  Constructed in 1997, the building rests on an 11.33-acre parcel of land and features a solar-array on the building and parking structures that provide approximately one megawatt of power to this facility.

“The seller purchased the property shortly after it was constructed, 19 years ago,” says Korth.  “We are very pleased that CCIT II, a Phoenix-based REIT, added the headquarters to ts portfolio once the seller was ready to divest of this mission-critical property.”

Avnet, Inc. was founded in 1921 and posted fiscal year-end 2015 sales of $27.9 Billion.  The company is a Fortune 500 firm and one of the largest global distributors of electronic components, computer products and embedded technology.

CCIT II, a publicly registered, non-listed REIT, is sponsored by Cole Capital, the investment management business of VEREIT, Inc.

Melina Cordero, Americas Head of Retail Research at CBRE says, “While the headlines screamed that online sales grew dramatically and in-store sales declined in the holiday season’s early days, the more accurate account is that retailers’ omnichannel sales increased. Shoppers now use multiple channels – online, in-store and especially mobile – to research and then make their purchases. In addition, surveys indicate that shoppers are delaying their spending until later in the season, which bodes well for brick-and- mortar retail.”

• Record-high online sales: Consumers made $12.75 billion in online retail purchases over the five-day period from Thanksgiving Day to Cyber Monday, according to a study by Adobe. This represents a 14.7% increase over the same period last year. Black Friday registered the greatest growth in online sales, rising nearly a quarter (21.6%) above 2015’s level. This growth highlights the consumer trend towards online retail, but not necessarily away from brick-and-mortar shopping. The majority of these online purchases were made from established retailers with brick-and-mortar locations, according to the International Council of Shopping Centers (ICSC). Many of the nation’s largest physical retailers invested heavily in expanding their e-commerce offer in 2016, which both facilitated holiday online spending growth and helped them capture more of it.
• Brick-and-mortar performance strong in prime assets: Despite online sales growth, many brick-and-mortar segments also reported traffic and sales gains. Many retailers contend that e-commerce is helping raise in-store conversion rates. Among malls, ICSC reports that a higher proportion of U.S. adults shopped in physical stores over the Thanksgiving and Black Friday period this year compared with last year (57% vs. 51%). Affirming the trend, several major mall operators reported year-over-year traffic and sales increases across their portfolios. However, this growth is increasingly concentrated in prime assets like super-regional malls, while many Class B and C centers face flat or declining traffic—a trend seen throughout the year. Among retailers, many brands found that conversion rates were actually higher than in previous years, as consumers increasingly leverage online channels to browse before purchasing in-store. This raises the proportion of in-store customers who actually spend and offsets flat or declining traffic trends.
• Consumers turn to mobile: A record 40% of online sales on Thanksgiving Day occurred on mobile devices (smartphones and tablets), according to Adobe. Of the $771 million spent through the mobile channel, 67.5% occurred through smartphones and 32.5% on tablets. The data affirms consumers increasing reliance on mobile as a key tool for shopping, browsing and purchasing. More importantly, mobile is seen as a key complement for brick-and-mortar retail; surveys indicate consumers prefer to combine mobile with online and brick-and-mortar visits as they price compare and test products before purchasing. As this trend continues, retailers need to focus on better integrating mobile and leveraging its rise to complement and drive store traffic.
• Customers have more to spend: Though online sales increased significantly year-over-year, consumers reported that there is more to come. Separate surveys by both Adobe and the NRF found that spending per consumer was slightly less than in 2015. Though this is partly attributed to this year’s heavy promotional environment, it is also because consumers are waiting for better deals closer to the holiday. NRF found that fewer consumers felt they’d finished their holiday shopping (11% this year vs 9% in 2015) and almost a quarter (23%) said they hadn’t even begun (up from 19% in 2015). This suggests consumers are poised to spend later this season than in past years, which can benefit brick-and-mortar retailers as delivery windows close on online orders in the final days before Christmas.