Los Angeles and Phoenix, Ariz. –Equus Capital Partners, Ltd. (“Equus”), one of the nation’s leading private equity real estate fund managers and iStar Inc. (“iStar”), announced today the formation of a joint venture to complete the $53,150,000 acquisition of McDowell Mountain Business Park in Scottsdale, AZ.

McDowell Mountain Business Park is a premier Class A office complex comprised of two identical three-story office buildings totaling 255,573± rentable square feet, located at 16425 and 16552 N. Pima Road, Scottsdale, Arizona.  Mesa West Capital has funded $42.6 million in first mortgage debt for the acquisition of the project.  The venture acquired the REO property from RAIT Financial Trust

McDowell Mountain Business Park was built in 2006 and 2007.  The property was 74% leased at acquisition to a diverse group of tenants. This upscale property is situated in a prime central location on the Loop 101 just north of Frank Lloyd Wright Blvd, providing easy access, excellent visibility and exposure.  Each L-shaped building offers expansive common areas with upscale finishes and floor plates that allows for maximum flexibility in layout and design.  In addition to its mountain views, the amenity-rich office complex is just minutes from a variety of nearby resorts, hotels and golf courses. A wide range of restaurants and retail stores are also nearby, and the buildings are only three miles from the Scottsdale Municipal Airport.

“We are pleased to expand our relationship with iStar and look forward to implementing our business plan on another well-located and high-quality project,” said Jonathan Praw, who oversaw the transaction. Praw, a Senior Vice President and Head of West Coast Operations for Equus, is based in the firm’s Los Angeles office.

This is the second joint venture for Equus and iStar in the Scottsdale market. The venture also owns Raintree Corporate Center, which is currently 95% leased, up from 51% at the time of acquisition in September 2015.  Raintree Corporate Center is a mile south of McDowell Mountain Business Park.

“We are excited to partner once again with a highly respected group like Equus. This opportunistic acquisition positions us to capitalize on the success we’ve had with our existing Raintree asset, with an attractive investment alongside a best-in-class owner,” said David Sotolov, Executive Vice President and Head of West Coast Investments, who oversaw the transaction for iStar.

“Equus and iStar are strong sponsors with a demonstrated track-record in the Scottsdale submarket,” added Jason Bressler Mesa West Vice President who originated the financing.
iStar has invested in Class A office, retail, industrial and residential projects in the greater Phoenix market for more than two decades.  This joint venture was made on behalf of Equus Investment Partnership X, L.P., a discretionary fund managed by Equus. Affiliates of Equus also own Scottsdale Gateway I, a 106,931-square-foot office building, and 92 Mountain View, a 116,200-square-foot office building, in the Scottsdale area.

Bryan Taute, Jim Fijan and Will Mast with CBRE’s Phoenix office headed the negotiations on the transaction between Buyer and Seller. Bryan Taute has also been appointed to spearhead leasing and marketing activities for the property.  Mesa West Capital’s five-year floating rate interest only loan was arranged by Rocco Mandala with CBRE in the firm’s Phoenix office.

Immediate competitive inventory boasts sustained, sub-10 percent vacancy rate

PHOENIX, AZ – The Phoenix office of JLL has just closed a $10.5 million ($164.67 PSF), three-building flex office portfolio sale in McDowell Mountain Business Park, a segment of metro Phoenix that for years has sustained a sub 10-percent vacancy rate for its Class A flex office and industrial space.

“This is a niche area of the northwest Valley that appeals to tenants looking for superior office, flex or industrial space,” said JLL Senior Vice President Brian Ackerman, who represented property seller Aegis I, LLC in the portfolio sale. “It’s less than one mile from two Loop 101 freeway interchanges and only a few miles from the Scottsdale Airport, McDowell Mountains and some of the Valley’s most elite executive housing, retail and dining. The location, combined with the quality construction of these three buildings, will definitely stand the test of time.”

The three-building sale totals 63,763-square-feet of institutional-grade flex office space at 9171 E. Bell Road, 9181 E. Bell Road and 16611 N. 91^st Street in Scottsdale – at the southeast corner of Bell Road and 91^st Street, just off of the Loop 101 freeway. All three buildings feature modern architecture, high ceilings and roll-up doors to accommodate high-profile retail showroom businesses and office users.

The portfolio sits within the McDowell Mountain Business Park, which totals more than 2.2 million square feet of office, flex and industrial space designed for tenants needing quality space in a premier Scottsdale Airpark location.

According to JLL, the combined vacancy rate for the park’s 50 buildings has remained at sub-10 percent throughout the recession. That rate is even lower today, now at a combined 5.2 percent vacancy. At the same time, rental rates in McDowell Mountain Business Park have continued to increase, with many buildings now hitting $1.00 per-square-foot NNN and higher for quality Class A product.

The portfolio investor, California-based Crown Realty and Development, represented itself in this sale. Michelle Gardner with Shell Commercial will continue to maintain the buildings’ leasing assignment.

To learn more Ackerman should be reached at 602.282.6300