Phoenix, AZ – CBRE has completed the sale of a commercial property located in the Arizona Business Park at 15401 N. 29^th Avenue in Phoenix. The property, a former Bally Total Fitness facility redeveloped for office use, commanded a sale price of more than $3.9 million ($106 PSF).

Ashley Brooks and Jim Bayless with CBRE’s Phoenix office negotiated the transaction. The seller was James Greaves with G2 Capital of Scottsdale. The buyer was Phoenix-based Retinal Consultants of Arizona, which is the largest ophthalmology practice in Arizona with a focus on the diagnosis and management of the retina and vitreous. Retinal Consultants will utilize the property to see patients. They will also run company administration operations from this location.

“This was an exciting project with many nuances. We’re glad that Retinal Consultants of Arizona chose to buy the building and make it their premier location. They got an essentially new building at a great price,” said Greaves

“The Valley’s office market is facing a dearth of high quality, function space,” said CBRE’s Brooks. “Office users, especially those with larger footprints, know they need move on space quickly if and when it becomes available. This sale is a reflection of that reality. The market is going to see a lot more redevelopment this year to try and accommodate the demand for modern office space.”

Recognizing the opportunity to redevelop the distressed property for alternative uses, G2 Capital purchased the former Bally’s in early 2015 for just over $1 million. G2 Capital spent several months researching the market for this opportunity. Immediately after closing escrow, G2 Capital demolished all existing improvements, including the locker rooms and pool, and began to add glazing, landscaping, a new parking lot and new HVAC units.

Originally developed in 1988, the 36,678-square-foot property is situated at the northeast corner of 29^th Avenue and Greenway Road in the Arizona Business Park within the I-17 Freeway corridor of north Phoenix.

Phoenix, AZ – USAA Real Estate Company of San Antonio, Texas, in association with Tempe, Arizona-based Metro Commercial Properties, has broken ground on a speculative office development in the I-17 / Deer Valley submarket in Phoenix. The development, named Norterra West, will include two (2), three-story Class-A office buildings approaching 300,000 square feet, and will capitalize on the pent-up demand for large blocks of quality, contiguous space from users looking to enter or expand into the economically attractive Phoenix labor market.

Norterra West — the first speculative office development to break ground within the City of Phoenix in the last five years — is situated on a 23.3-acre land site prominently situated along the northbound I-17 Freeway in north Phoenix, at 25700 and 25800 North Norterra Parkway.

Construction began in July 2015 on the first of the two planned office buildings at Norterra West. The site master plan and the architectural design of the first building were led by Tempe, Arizona-based design firm Davis; Wespac Construction is the general contractor. That first building is a three-story, 144,350 square foot, Class A office building that will be ready for tenant occupancy in June 2016. The building is LEED^® targeted and will have a surface parking ratio of six (6) spaces per 1,000 square feet, with the ability to serve a parking ratio as high as 8 per 1000 with the construction of garage structures.

“Norterra West is one of the only large master-planned corporate office parks in Phoenix that combines excellent accessibility, new and efficient office product, walk-able retail amenities, and affordable residential opportunities into a cohesive park environment,” stated Ryan Foley, Principal and Chief Operating Officer of Metro Commercial Properties. “Norterra’s master plan governance includes very strong development standards designed to preserve the safe, secure and quality office environment required by corporate users to aggressively recruit and retain an educated and affordable labor base.”

A second phase office building has been entitled through the City of Phoenix Planning department, to be located immediately north of the Phase One Building, which when completed, will accommodate employment growth at the Norterra West master planned corporate office park, to a total of more than 1,800 employees at the 2-building campus.

“Adding new high-quality speculative corporate office space is a good sign for the Phoenix economy,” said Mayor Greg Stanton. “Norterra West will help the City of Phoenix match prospective local, national and global employers with immediate and competitive office space while tapping into our educated and affordable labor base.”

USAA Real Estate Company has selected CBRE as its exclusive agent to market and pre-lease Norterra West. The team of Ashley Brooks, Jr., Jim Bayless and Jenny Aust Turner was selected given their extensive focus on the North and Northwest Valley submarkets, their long-standing relationships with many of the large corporate back-office users in the Deer Valley / I-17 submarket, and their proven experience working with Greater Phoenix Economic Council (GPEC) leadership, and the office of Phoenix Economic Development.

“Office vacancy rates in the Deer Valley office submarket remain above stabilized levels, but there is a shortage of large blocks of Class-A office that can provide the high-density parking ratios, power infrastructure, and large efficient open office environments that Fortune 500 companies want,” said CBRE’s Ashley Brooks. “With our partners at USAA Real Estate Company and Metro Commercial Properties, we hope to raise the bar and provide new office product that will be unmatched in the North Phoenix submarket.”

“USAA is catalyzing growth with innovative development in north Phoenix,” said Phoenix City Councilwoman Thelda Williams, in whose district Norterra West will be built.  “Breaking ground on a Class A office development is a win for Phoenix because it attracts growth in other businesses and retail, and brings much needed office space to our market.”

From L to R: Mike Edwards, Davis; Dirk Mosis, USAA Real Estate Co.; Rob Schaffer, USAA; Mayor Greg Stanton, City of Phoenix; Council Woman Thelda Williams, City of Phoenix; Pat Althoff, Metro Commercial Properties; Bruce Pedersen, USAA Real Estate Co.; Brad Smidt, GPEC

Phoenix, AZ – CBRE has completed the sale of the Farmers Insurance Building, a ±106,397-square-foot single-tenant office building located at 16001 N. 28^th Avenue in Phoenix. The property, which is located in the Arizona Business Park in the I-17 corridor, commanded a sale price of $16.85 million ($158 PSF).

Barry Gabel and Chris Marchildon, along with Ashley Brooks, Jim Bayless and Jenny Aust, of CBRE’s Phoenix office represented the seller, Newport Beach, Calif.-based Sabal Financial Group through an entity Granite Twenty Eighth Holdings, LLC. The buyer was Select Income REIT of Newton, Mass.

“This is a savvy buyer who fully understands the unique dynamics of the Arizona Business Park and the strength of the I-17 corridor,” said CBRE’s Gabel. “The tenant has been in the corridor for decades and has long been able to draw from a diverse and dynamic labor pool. This sustainable success has made Farmers Insurance an ideal tenant, and in turn, has made the property a smart investment.”

Located in the Arizona Business Park with frontage along Interstate-17, the Farmers Insurance property benefits from its location among some of the top employers in the metro area. The park has proximity to a large and diverse labor pool – over 2.43 million people within a 40 minute commute – and abundant retail amenities.

The transaction follows shortly after CBRE sold the State Farm building at 444 N 44^th Street that we reported on April 22, 2105.

The property will be managed by Reit Management & Research LLC, Real Estate Services, which manages nearly 70-million-square-feet of commercial office, industrial and medical office space across the country.