Foothills’ Office Condos Gain Momentum

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With office activity pretty much flat since 2012, a sudden surge in office condominium sales in the Northwest Foothills area of Tucson is seen as encouraging.

NORTHWEST SUBMARKET
Dr. Mikel Lo, About Faces Cosmetic Surgery, purchased a 5,225 sq. ft. class-A medical condo building at La Cholla Medical Park on the Northwest Medical campus, 5940 N La Cholla Blvd. in Tucson for[mepr-show rules=”58038″]$1.13 million ($216 PSF). The building (built 2003) was leased to a single tenant and had economic vacancy for one year when it sold. It will be owner occupied by Dr. Lo for About Faces next year when its lease at 6127 N La Cholla Blvd. expires. Compass Bank of Tucson handled financing. Doug Marsh with Oxford Realty Advisors in Tucson represented the seller, GACD, LLC of Newport Beach, CA. The buyer was represented by Clint Buckelew of Buckelew Realty in Tucson for this transaction.

Doug Marsh commented, “With interest rates being what they are, businesses prefer to buy rather than lease. To accommodate this trend, Oxford has taken on a condo conversion project in the Northwest to convert a retail center into office condos.”

Also at the La Cholla Medical Park on the Northwest Medical campus, 5910 N La Cholla Blvd. sold for $867,000 ($223 PSF) to the Northwest NeuroSpecialists Medical Group. Built in 2004,  the 3,887 sq. ft. four-condo building was move-in ready for buyer that plans to occupy immediately. Alliance Bank handled the

financing. Doug Marsh of Oxford Realty Advisors in Tucson represented the sellers, Mr. & Mrs. Randall Cohen. The buyer was represented by Alan Moore of Chapman Lindsey in Tucson.

“As the office market comes back, it seems natural for medical use to be in the forefront, since medical space needs are the most predictable for long term space requirements,” according to Gary Heinfeld, CCIM of Advisors in Real Estate

Heinfeld sold a 1,200 sq. ft. condo at San Jose Plaza, 10134 N Oracle Road #11 in Oro Valley for $252,000 ($210 PSF) to Oro Valley Weight Loss Clinic, Dr. Robert McCarver of Chandler. This will be the first office in Tucson for Dr. McCarver. Built in 2009, the building was being marketed for lease or lease-purchase. This is the first occupant in the new condo that sold ready to move-in, after paint and flooring is finished for final build out. Gary Heinfeld, CCIM of Advisors in Real Estate represented the seller. The buyer was represented by David Montijo, 1st Vice President and Bruce Suppes, Vice President with CBRE in Tucson.

Domino Pizza purchased a 3,025 sq. ft. office condo for its Tucson administrative office at Magee Corporate Center, 2205 W Magee Rd. in Tucson. The sale price was approximately $386,000 ($128 PSF) for shell condition in this class-A complex. Constructed in 2007, the 24 month road construction project now completed along Magee and La Cholla must be welcomed news. Domino will be next to Arizona Sunset Dental and complete the tenancy in this building. Tom Nieman and Rick Kleiner, MBA, Principals and Office Specialists with Cushman & Wakefield / Picor Commercial Real Estate Services handled the transaction.

Nieman reported that Magee Corporate Center at the southwest corner of Magee & La Cholla has only one 2,251 sq. ft. shell condo remaining and the developers are considering whether or not the time has come to build another shell office building.

Craig Courtney, owner and developer of Magee Center Office Condominiums, on the northwest corner agrees, “There seems to be signs of a shortage in office inventory coming to the Foothills; but added, as long as there exists such a wide gap in pricing between ‘buying new’ versus ‘refurbished’, it’s challenging to know if new construction is warranted.” Courtney has plans to develop his corner as 50,000 sq. ft. retail and 20,000 sq. ft. office and potential hotel site

Across the street, on the southeast corner at La Cholla Corporate Center, Amram Dahukey, MD bought a 1,748 sq. ft. medical condo at 7590 N La Cholla Blvd. in Tucson for a Podiatrist office

from Dr. Rosenfeld for $230,000 ($132 PSF). Property was previously occupied by the seller as medical space. Buyer purchased to owner occupy dba Premier Foot and Ankle Surgeons. Nancy Gansline of Oxford Realty Advisors in Tucson represented the seller and David Montijo of CBRE in Tucson represented the buyer in this transaction.

Dr. Wenhui Cai bought a 2,567 sq. ft. condo at Plaza Campana, 6879 N Oracle Rd. #32 & #33 in Tucson for $346,545 ($135 PSF) for investment. The condo located southwest of Ina and

Oracle was vacant at time of sale. This is Cai’s second condo purchase in the complex for investment. John Yarborough of Romano Real Estate handled the transaction. Yarborough has listing for the 2,567 sq. ft. available for lease at an asking rate of $22/SF/modified gross in this class-A complex.

Palm Canyon Dermatology, Dr. Gregory Ertle is relocating from Yuma and purchased the 2,143 sq. ft. condo at 12460 N. Rancho Vistoso Blvd., Ste 110 in Oro Valley for $300,000 ($140 PSF). The space was previously owner occupied dba Desert Day Spa. The clinic will be open for business on September 3 according to the recorded phone message there. We were unable to determine if there were brokers involved.

Marsh and Gansline with Oxford Realty can be reached at (520) 232-0200. Buckelew at Buckelew Realty is at (520) 975-2409. Moore with Chapman Lindsey can be contacted at (520) 747-4000. Heinfeld with Advisors in Real Estate should be reached at (520) 299-0760. At CBRE, Montijo is at (520) 323-5136 and Suppes is at (520) 323-5155. Nieman can be contacted at (520) 546-2728 and Kleiner is at (520) 546-2745 at Picor. Courtney of Courtney Realty can be contacted at (520) 293-8280. Yarborough of Romano Realty can be reached at (520) 577-1000.

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[ismember] 5940 N La Cholla sold on 5/16/2013. Tucson class A office (BOMA class B). The recorded buyer was MTCL, LLC and seller, GACD, LLC. It was in escrow 90-days. Buyer put $175,000 down and financed the balance.
5910 N La Cholla sold on 5/13/2013. Tucson class A office (BOMA class B). The recorded buyer was Four Legged, LLC (Drs. David Weidman, Reuben Hill et al, and seller, Mr. & Mrs. Randall S & Cathryn Cohen of Tucson. The escrow time was 45-days. Buyer put $214,000 down and financed the balance.
10134 N Oracle Rd #11 sold on 6/19/2013. Tucson class A office (BOMA class B). The recorded buyer was Oro Valley Weight Loss Clinic, LLC and seller San Jose Commercial Center Lot 4, Inc. Square footage is appraised SF, assessor uses 1,143 SF. Escrow time was 23 days, all cash.
2205 W Magee Rd #22 & 23 sold on 5/23/2013. Tucson class A office (BOMA class B). The recorded buyer was Team So-Cal, Inc. of Ventura, CA and the seller, Landmark Title Trust #18,183-T, Magee Corporate Center, beneficiary. The space was on the market for sale or lease at $21.96 / SF. Escrow time: N/Av, all cash transaction.
7509 N La Cholla sold on 6/3/2013. Tucson class A office (BOMA class B). The recorded buyer was 7590 La Cholla, LLC and the seller, Rosenfeld Building, LLC of Virginia Beach, VA. Square footage is per tax assessor. Escrow time: N/Av, all cash.
6879 N Oracle sold on 4/25/2013. Tucson class A office (BOMA class B). The recorded buyer was Cyan, LLC and the seller, San Carlos Institute of Art & Design, Inc. of Tucson. Escrow Time: N/Av, all cash. The other condo Dr Cai purchased last year by this same buyer is currently leased on a short term lease to Nova Homes.
12460 N Rancho Vistoso Blvd sold 4/25/2013.Tucson class A (BOMA class B). The recorded buyer was Gregory A & Sue A Ertle, the seller PR Properties, LLC Pamela Crim. Escrow Time: N/Av, all cash deal. SF is per buyer, tax assessor shows 2,119 SF. [/ismember]