Renovations, management at Camelback Corridor property ensure long-term value for new ownership

PHOENIX, Arizona – LPC Desert West, the Southwest division of Dallas-based Lincoln Property Company, has announced the sale of Twenty Seven Camelback, a Class A, trophy office building located in the heart of Phoenix’s coveted Camelback Corridor. The 109,291-square-foot building is located at 2777 E. Camelback Road, immediately west of 28^th Street.

LPC purchased Twenty Seven Camelback in 2017 and immediately renovated the building with an upgraded lobby, new conference facility, outdoor lounge area and improved signage, landscape and hardscapes. It also completed improvements to secure ENERGY STAR Certification by the U.S. Environmental Protection Agency (EPA), denoting an average 35 percent less energy use than a typical building and the release of 35 percent less carbon dioxide into the atmosphere.

Other amenities at Twenty Seven Camelback include touchless entries, 13-foot ceilings, modern open layouts with exposed concrete aesthetics, flexible 36,000-square-foot floorplates, views of surrounding mountains and a two-level subterranean parking garage with direct elevator access to tenant spaces.

LPC has provided institutional-level asset, property management and leasing services at Twenty Seven Camelback since its acquisition of the property. The company will continue to manage and lease the building for the new owners, Rosebud Properties.

“This portion of the Camelback Corridor has enjoyed an extended period of renovation and new construction, which has even further cemented the long-term value of Twenty Seven Camelback,” said Lincoln Property Company Vice President John Orsak. “This has always been a very flexible building, able to accommodate a wide range of tenants in one of the Valley’s most sought-after office corridors. We’re confident it will perform well for its new owners as the office sector continues to rebound.”

Twenty Seven Camelback is currently 87 percent occupied by tenants such as UMB Bank, Abrazo Medical Group and Lavidge. It is surrounded by landmark office, retail and restaurant destinations, as well as newer developments such as the Cortland Biltmore luxury apartment community and an AC by Marriott hotel.

The building offers prominent signage exposure to Camelback Road, is minutes from State Route 51 and Sky Harbor Airport, and is walkable to more than a dozen restaurants and Biltmore Fashion Square.

Barry Gabel and Chris Marchildon from CBRE represented LPC in the sale transaction. To discuss leasing, investment or property management opportunities with Lincoln Property Company in the Desert West region, please call David Krumwiede or John Orsak at (602) 912-8888.

We’re pleased to announce the August mid-year issue of Trend report  is out! Trend report,  a sister company to the Real Estate Daily News, is a monthly publication that covers  new developments, transactions, market trends, policy issues, as well as in depth submarket and sector updates contributed by industry leaders. The editor’s comments from the August issue follows:

We’ve cast a wide net for trends in this mid-year issue.

While commercial real estate leaders watch the housing market and overall economy for signs of a recession, the National Association of Realtors chief economist said this week to “look to commercial real estate for clues about the direction of the economy and whether or not we are heading into a recession.”

Our standard way of doing things is being turned upside down, including looking for real estate trends and Tucson just set a record sales price for multifamily on July 5th.

There’s nothing straightforward about the question – “are we heading into a recession?” It’s just more chaos for now, as witnessed during the first half of the year and more of the same expected on the back end of the year. Statistically, there are still two job openings for each unemployed person nationally. So, it’s difficult to see a recession, this year at least.

The ability to adapt and innovate is more important now than ever. Maybe this is the new normal. There are opportunities among the challenges being faced, and some will gain by these opportunities.

Amongst all the chaos, our mid-year issue of Trend report, wanted to highlight some young leadership in our community.

Content contributors such as Zach Yentzer, Executive Director of Tucson Young Professionals with almost 1,000 members; John Winchester, Director of Government & Community Engagement at ASU; Liz Pocock, CEO of Startup Tucson; Dre Thompson,CEO of Tucson Industrial Development Authority; and Rob Elias, President/CEO of Tucson Hispanic Chamber of Commerce, inspire hope and optimism with their work multiplying community leaders.

Members of the Millennial generation (born between 1984–2002), are hungry to change the world. In the next fifteen years, 45 percent of the workforce in the U.S. will be disappearing, mostly Baby Boomers. These vacancies must be filled by young, trained leaders; and to this end, Jim Marian updates us on his work with the MRED program at UA, and Ethan Orr, Director of UA’s Agriculture, Natural Resources, Economic and Community Development Programs, reminds us of the great youth leadership development programs UA offers across the state.

Sam Credio, PE, Director of DTM at the City of Tucson, lays out what to expect from his $280 million for road improvements, calling it a “historic investment in our community.” Prop 411 promised to bring road improvements to every neighborhood street in the City within the next ten years, and we’re confident if anyone can, Sam can.

The mid-year economic outlooks from Ryan Severino, Chief Economist at JLL; Danny Court, Senior Economist at Elliott D Pollack & Company; and George Hammond, Director of the Economic & Business Center of Eller College of Management at UA help explain some of the market conditions to watch.

Housing permits discussed by Jim Daniel of RL Brown remind us that Tucson and the state of Arizona don’t generally follow national trends and fare much better than most other areas, amid the economic and population expansion we are experiencing.

We are delighted to welcome a newcomer to Tucson in this issue. David Krumwiede, Senior Executive Vice President of Lincoln Property Company, which recently closed on 77 acres of land to pave the way for I-10 International, a one million square foot, Class A industrial project, in a Trend report exclusive, explains “Why Tucson?” for this $260-million “creative industrial” vision.

In conclusion, Jessa Turner, Director of Communications, Tech Parks Arizona, walks us through what’s happening at the Tech Park.

Commercial Sales Activity for Pima County shows a 104% increase in sales volume over last month and a 50% increase YOY in volume, with July expected to be much the same according to RED Comps tracking.

Demand for Tucson’s multifamily market continued its stable performance and elevated rent growth in Q2 with healthy sales volume. Many investors are relying on continued rental growth in Tucson, as the value-add market remains strong.

Our next Trend report for September will be on Multifamily, so expect more details then. See PICOR’s Q2 2022 Marketbeat.

Tucson’s industrial market became increasingly active in Q2, with 164,423 SF of positive net absorption, a threefold increase from Q1. See CBRE’s Tucson Industrial Q2 2022.

Tucson retail is recovering, with more fitness gyms, nail salons and restaurants coming to strip centers and is expected to hold up to CBRE’s National Q2 2022 Figures.

Tucson’s office market is another story and saw a downturn in net absorption Q2, reaching the largest net negative absorption as well as highest increase in vacancy for the past four years. Some form of working from home appears to be a permanent feature of our new normal. See CBRE’s Tucson Office Figures Q2 2022.

It’s an eclectic issue, which matches an eclectic first half of the year. Thanks to our Trend report team: Patti van Leer, Michael Rossmann, Melissa Vucijevic, and Jack Paddock for their help.

And thank you to our readers for your continued support. As always, we appreciate your feedback and welcome any comments.

If you don’t subscribe and would like to learn more about Trend report, or receive a complimentary copy of this issue, please email us at [email protected].

Karen Schutte
Managing Editor

Tucson, Arizona –A self-storage developer has closed on the sale of their third Storage Development Opportunity in the Tucson market. The 4.63 acres of vacant land at 4002-4032 East Fort Lowell sold fully entitled for a 3-story, two above ground and one below, with plans for over 1,000-units in front and 150 RV spaces in back, to ES – Gibralter Fort Lowell Self Storage, an affiliate of Gilbert-based, Gibralter Holdings LLC for $4.75 million ($23.55 PSF).

The asset closed on July 15, 2022.  The buyer owns and operates other self-storage facilities in Tucson under the name of Extra Storage.

Abraham Slilaty is the seller, working under Fort Lowell Self Storage, LLC and has owned most of his land assets in Tucson for over 30 years. These sites have now become unique and strategically located within central areas of the City. The property was marketed as an asset offering with either a CofO sale or Development Opportunity sale built-to-suit. However, it sold as land along with fully engineered and approved development plans including architectural construction documents, and third-party engineering reports, even underground soils & geotechnical studies. The property is more than “shovel ready” it is literally being sold as a ready-to-build with permit in-hand property.

The seller / developer’s first self-storage project was sold in 2019 to a large private equity company. At the option of the buyer, the project was purchased as a Development Opportunity, whereby the buyer was able to break ground and oversee the construction themselves, yielding a newly constructed facility of 100,000 NRSF at a 45% discount from stabilized retail value.

This third sale is for land and entitlements only which included re-rezoning from R-2 to C-2 on the property.

The developer continues to hold in its land asset portfolio several one-of-a-kind sites in the heart of Tucson with un-met demand for storage. This makes the third of its kind projects are underway in the design & entitlement stage being made available for sale.

Bill Alter of Rein & Grossoehme Commercial Real Estate, LLC in Phoenix represents the seller in these transactions.

For additional information about this sale and current and future opportunities contact Bill Alter at 602.315.0771 or [email protected].

To learn more, see RED Comp #10044.