Popular “Live Work Play” Lifestyle of Midtown Attracts Buyers

Phoenix, Arizona – A portion of the office building at 3033 N. Central Ave. and its adjacent parking garage has been sold to a Canadian investor as its first Midtown Phoenix acquisition.  The buyer was attracted to the property because of its proximity within the increasingly popular “Live Work Play” Central Phoenix corridor.

“This complex transaction involved the sale of a portion of a nine-story mid-rise tower on Central Avenue,” says Mindy Korth, executive vice president with Colliers International in Greater Phoenix.  “Years ago, the tower had been converted to office condos and a real estate cycle downturn halted the unit sales to owner/occupants.  This left the tower with a portion of its square footage still landlord-controlled for multi-tenant leasing.  That status provided a unique opportunity for the buyer to gain a significant position on Central Avenue with a cost-effective investment.  The transaction presented a high level of complexity because the asset is involved in a condominium regime, owners’ association agreements and sharing of infrastructure services with the adjacent high-rise building.”

Korth, Charles Miscio and Kirk Kuller of Colliers International in Greater Phoenix represented the seller in the transaction.  Jim Bayless, Kate Morris and Vince Femiano of CBRE represented the buyer.

Phoenix Central Park Medical LP purchased the property from an entity represented by The Krausz Companies, a San Francisco based real estate company.

The post-modern design building was originally built in 1960 as a part of the class A Prudential Plaza that also includes a 25-story high-rise. It was extensively remodeled in 2005, when the condominium regime was established.  Located on 2.68 acres of land directly across from Park Central Mall it is in the heart of Midtown.

The sale included 80,230-square-feet of multi-tenant office space, which was 30 percent leased at the time of the sale.  The overall building area totals approximately 134,164-square-feet.  The Buyer came to the transaction with a sizable prospective tenant that is poised to lease approximately 38,000-square-feet of the tower’s vacant space.

“This asset offered tremendous upside at a fraction of replacement cost,” says Korth.  “Central Phoenix is attracting a wide range of employers and new residents and has become a 24/7 community. The Midtown submarket is poised for dynamic recovery and the buyer will benefit from the timing of their purchase.”

The Krausz Companies specialize in the acquisition, development and management of high quality, well-located retail, office, industrial and mixed-use properties throughout the United States.  www.krauszcompanies.com

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Rillito Marketplace One, LLC an affiliate of the Krausz Companies, Inc. (Ron Krausz, President) of California closed on its second acquisition in Tucson, the Rillito Crossing Marketplace at 4206-4282 N 1st Ave. for[mepr-show rules=”58038″]$16.9 million ($134 per foot) from Continental Tucson 61, LLC, an affiliate of Continental Properties, Inc. The 126,017 aggregate rentable sq. ft. on 13.31 acres is located at the northeast corner of 1st Avenue & Limberlost; 34,643 sq. ft. of this aggregate was planned future space at time of sale.

The Krausz Companies, established in 1996, is a privately held California company. This second acquisition for Krausz in Tucson comes almost exactly one month after acquiring Campbell Plaza Power Center at Campbell and Glenn in Tucson for $31.5 million. Nancy McClure and Michael Sandahl of CBRE in Tucson handled the Campbell Plaza transaction and continues to lease that property for Krausz.

The Krausz Companies also owns the Prudential Plaza Office Tower in Phoenix, located on Central Avenue Corridor in midtown Phoenix. Krausz is interested in additional retail and office investment opportunities in Arizona.

Continental Properties Company, Inc. (James H. Schloemer, Chairman & CEO), the seller and developer of Rillito Crossing, is privately held and headquartered in suburban Milwaukee, Wisconsin. Rillito Crossing was its only venture in Tucson, which began development in 2007; L.A. Fitness opened there in 2007 and Sunflower Market and additional in-line retail space and pads followed in 2009. Sunflower Market merged with Sprouts last year and changed its name to Sprouts.

Rick Borane commented, “Although Campbell Plaza and Rillito Crossing Marketplace properties differ in many ways, the investor was attracted to both centers due to the tenant mix. Rillito Crossing, with L.A. Fitness and Sprouts as anchors, is also positioned close to student housing that gives it enhanced tenant appeal with consistent day and night traffic.” The center was approximately 90% occupied at time of sale, with 10,000-11,000 sq. ft available and running lease rates of $24 per sq. ft.

Rick Borane and Dave Hammack of the Volk Company of Tucson handled the Rillito Crossing project from its inception, and represented Continental in both its acquisition and sale. Borane and Hammack continue to be retained by the Krausz Companies for the management and leasing at Rillito Crossing.

David Pyle, VP at Krausz , is at (415) 732-5600. Continental Properties can be contacted at (262) 502-5500. Dave Hammack and Rick Borane at Volk Company should be reached at (520) 326-3200.

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