Lincoln Property Co. and Oaktree Capital Management sell Class-A office project to private equity real estate fund

PHOENIX, AZ – Velocis, a private equity real estate fund, today announced the purchase of Camelback Square, a three-story Class-A office project in the heart of Old Town Scottsdale, Arizona. The asset was previously owned by Lincoln Property Company (LPC), along with a fund managed by Oaktree Capital Management, L.P. (Oaktree).

The sale underscores the attractiveness of the project and Old Town Scottsdale.

“The Old Town Scottsdale office market is an extremely popular area that is experiencing steadily rising rents and values,” said Velocis Principal Paul Smith. “Camelback Square is our first acquisition in the Phoenix market, and one we hope to build on as we pursue additional assets in the Southwest region.”

The project buyer, Dallas-based Velocis, has been active in real estate investment since 2011, purchasing 16 assets located in markets in Texas, Colorado, Georgia, Florida and North Carolina. Velocis is led by a team of five seasoned principals who are directly responsible for the acquisition, asset management and disposition of assets.

LPC will continue to manage the property for the new owner.

“Over the last few years, we’ve witnessed a strong tenant demand in Old Town Scottsdale due to the surrounding amenity base of high-end residential, luxury shopping, hotels and entertainment options,” said Oaktree Managing Director Mark Jacobs. “We believe the tenant demand will continue and are looking to make additional investments in Old Town Scottsdale along with other areas of Phoenix.”

The 174,917-square-foot Camelback Square is located at 6991 E. Camelback Rd., at the southwest corner of Camelback and Goldwater roads. It is currently 95 percent leased to tenants including Mastro’s City Hall Steakhouse, ZocDoc, Regus, Ashton Woods, Echo Global Logistics and Digital Airstrike. The project’s on-site amenities include the award-winning Mastro’s (a top 10 steakhouse in the U.S.), a bistro, tenant collaboration space and common area Wi-Fi.

“Old Town Scottsdale is an example of the new creative office environment, with the amenities investors look for to deliver solid rent growth, rising values and strong tenants year after year,” said Lincoln Property Company’s Executive Vice President David Krumwiede, who completed the deal along with Vice President Amr Ceran. “We recognized this when we purchased Camelback Square almost four years ago, and that foundation is even more evident today – following the execution of a repositioning plan that re-energized this asset as a long term centerpiece project.”

LPC and Oaktree purchased Camelback Square out of special servicing in June 2011. Since that time, they have completed a major renovation including new building entrances, modern lobby and common area finishes, a courtyard water feature and patio furniture, and upgraded building signage. They also initiated an aggressive leasing plan that – in partnership with Bill Blake, Craig Coppola, Andrew Cheney, Colton Trauter and Gregg Kafka of Lee & Associates – moved the project from just 50 percent occupied to almost 100 percent occupied.

Barry Gabel, Chris Marchildon, Kevin Shannon, Ken White and Paul Jones of CBRE led the project’s investment sales listing campaign.

Camelback Square sits adjacent to the 2 million-square-foot Scottsdale Fashion Square regional shopping center featuring the state’s only Barney’s New York and Neiman Marcus. It is located in the heart of Old Town Scottsdale, a submarket that consistently attracts forward-thinking companies seeking the area’s contemporary mix of office, residential, dining, arts and entertainment destinations.

To learn more about leasing availablity at Camelback Square or to discuss additional investment opportunities in the Desert West Region, please contact David Krumwiede or Amr Ceran at (602) 912-8888.

TEMPE, AZ – CBRE has announced the sale of Papago Arroyo Office Complex, a three-building office complex in Tempe, Arizona. The 279,503-square-foot, two-story office buildings are located at 1255, 1275, and 1295 West Washington Street in the geographic heart of metropolitan Phoenix, and the highly desirable City of Tempe office market. The asset commanded a sale price of $40.85 million ($146 PSF).

Bob Young, Glenn Smigiel, Steve Brabant and Rick Abraham with CBRE’s Phoenix office, along with Andrew Cheney and Craig Coppola with Lee & Associates, represented the seller, Greenwood & McKenzie of Tustin, Calif., in the transaction. The buyer was undisclosed.

In addition to handling the investment sale, CBRE Vice Chairman Bruce Francis and Vice President Shaun Moothart, both with the CBRE Debt & Structured Finance team, arranged the ten-year loan on behalf of the borrower. The permanent financing included 5 years of interest-only.

Constructed in 1998 and 96 percent leased, Papago Arroyo is part of Papago Park Center, a 350-acre infill business park with a strong corporate tenant profile, including Wells Fargo, DHL, Union Bank, State Farm, and First Solar. The Tempe submarket has a 10.3 percent vacancy rate, less than half the overall office market vacancy rate in metropolitan Phoenix. This is indicative of the strong tenant preference for a location in Tempe.

“Tempe continues to perform at the top of the metropolitan Phoenix office market. Papago Arroyo offers tenants a centralized, highly desirable location with a strong amenity base and access to one of the strongest labor pools in the Valley,” said CBRE’s Young, lead broker in the investment sale.

“The outstanding central location of the property with its close proximity to Sky Harbor International Airport and the major valley freeways made this a very desirable financing opportunity for a wide variety of lenders and will ensure the property’s ability to draw tenants and stay well-occupied into the future,” says Francis.

Papago Arroyo is located near three major freeways, offering immediate access to the Loop 202 Freeway, the Hohokam Expressway (State Route 143) and Interstate 10. Sky Harbor Airport is within a five minute ride from Papago Arroyo or via a short walk to one of Phoenix’s Light Rail stations.

To learn more the CBRE brokers and finance team can be reached at 602.735.5555.

Phoenix, Ariz. – CBRE has negotiated the sale of the leasehold interest in Rimrock at ASU Research Park in Tempe, Ariz.  The two-building, ±83,764-square-foot office complex located at 2030 and 2050 East ASU Circle in Tempe, Ariz. commanded a sale price of $18.4 million ($220 PSF). The project was 93 percent leased at time of sale.

Bob Young, Steve Brabant, Glenn Smigiel and Rick Abraham with CBRE’s Phoenix office in conjuncture with Craig Coppola, Andrew Cheney, Bill Blake and Colton Trauter with Lee & Associates brokered the transaction on behalf of the seller, Rimrock Investors II of Phoenix. The buyer was Las Vegas, Nev.-based W Tempe, LLC.

“Rimrock is an excellent investment opportunity in Tempe and in one of most prominent business parks in the metro area,” said CBRE’s Glenn Smigiel. “ASU Research Park benefits from a unique partnership shared with Arizona State University which aids in fostering tenant growth by providing direct access to ground-breaking research, educational opportunities, faculty, and a young, educated technology minded workforce.”

Developed in 2007 by Rimrock Partners (Dean Riesen, Managing Partner and Ron Moore, Partner), the two building office complex is leased to three tenants, including Iridium Satellite, a global mobile satellite company; KINETX, an engineering, technology, software development and business consulting firm specializing in aerospace systems; and Comsys Information Technology Services, a wholly owned subsidiary of Manpower, Inc. Rimrock sits on ±10.10 acres and is comprised of two class A office buildings totaling ±25,457 square feet (2030 Building) and ±58,307 square feet (2050 Building) that also include flex and R&D space for the current tenants.

Rimrock is situated in ASU Research Park which is located at Elliot Road and the 101 Freeway in Tempe. The 320-acre business park is considered one of the most notable business addresses in the Phoenix metropolitan area and is home to numerous corporate headquarters and R&D facilities providing a corporate and technology hub for southeast Phoenix.

Young, Brabant, Smigiel and Abraham can be reached at CBRE in Phoenix, (602) 735-5555. Coppola, Cheney, Blake and Trauter at Lees & Associates are at (602) 956-7777.