With the first two office buildings SkySong I and II almost fully leased and construction of a third, SkySong III, set to begin in September, Holualoa Companies of Tucson has bought out USAA Real Estate of Texas’ interest in SkySong, the ASU Scottsdale Innovation Center. The new partnership formed by Holualoa Companies, the ASU Foundation for A New American University, and Plaza Companies are now the entirety of the ownership at the project.
Founded in 1985, Holualoa is headquartered in Tucson, with offices in Los Angeles, Phoenix, Kailua Kona, Paris and Geneva. A real estate investment firm, Holualoa’s investments span the United States and Europe, with assets in excess of $600 million.
SkySong is home to a global business community that links technology, entrepreneurship, innovation, and education designed to position ASU and Greater Phoenix as global leaders of the knowledge economy. It currently consists of SkySong I and II, 290,000-square-feet in two office buildings, on 42-acres owned by ASU and ground leased to the mixed-use project. Located at Scottsdale and McDowell Roads in South Scottsdale, when fully complete SkySong will total more than 900,000-square-feet and bring total invested capital to almost $150 million.
Companies at SkySong enjoy a special relationship with Arizona State University that provides tenants with direct access to relevant research, educational opportunities and cultural events on its campuses. Through ASU’s on-site operations, tenant companies have a single point of contact for introductions to researchers, faculty and programs to address their specific needs.
Like the first two buildings, SkySong III will be built to meet LEED certification standards. The architectural design not only complements the rest of the project and the overall architectural quality of the Scottsdale area, it also includes significant consideration for sustainability. The 145,000-square-foot building will be located along SkySong Boulevard, just southwest of the project’s iconic shade structure.
Arizona State University will lease 1½ floors of the four-story building, and current SkySong tenant WebFilings will be expanding their presence in the project by taking a full floor in SkySong III. Plaza Companies will also be taking office space on the first floor. Combined, these three anchor tenants allow construction to begin with the building already 65% leased.
PlazaCompanies continues to be the master developer of the project, in partnership with the ASU Foundation and the City of Scottsdale. Additionally, pre-leasing continues for SkySong IV, which will be located next to SkySong III and face Scottsdale Road. SkySong IV is fully permitted and shovel-ready, and the SkySong team continues to work with prospective anchor tenants. Holualoa has discussed a continued partnership in SkySong IV, but have not yet committed to this next project.
DPR will be the General Contractor and Butler Design the architect for SkySong III.
Scottsdale Mayor Jim Lane said that the impact of SkySong on southern Scottsdale has been critical in sparking new economic development in this part of the community. Mayor Lane said, “SkySong has already made a significant impact in the Scottsdale and McDowell Road corridors in helping bring in new businesses and economic growth.”
More than 1,000 employees and 50 companies are already located on the SkySong property.
The estimated construction cost of SkySong III is $32 million. The construction of SkySong III will also include a significant parking structure to serve SkySong III and IV, as well as surface parking.
“We are excited about moving forward with our new partnership and continuing to build one of the biggest success stories our community has seen over the past few years,” said Sharon Harper, President & CEO of Plaza Companies. “Existing tenants and prospective tenants both have come to realize the unique value proposition of SkySong. We offer something special that no other project in Arizona — or the entire country — offers.”
Kevin Shannon, Vice- Chairman and Michael Moore, 1st Vice-President of CBRE in El Segundo, Calif., and Bob Young and Glenn Smigiel, Senior Vice-Presidents, Steve Brabant and Rick Abraham, Vice-Presidents of CBRE in Phoenix, represented the selling entity, USAA Real Estate, LP. They were assisted by Bruce Francis, Vice-Chairman Debt & Equity Finance, also with CBRE in Phoenix in obtaining buyer's financing. Financing for the acquisition was provided by Citigroup.
Christopher Krewson, Craig Coppola and Andrew Cheney, Principals with Lee and Associates of Phoenix continue as the leasing team for the project.
Shannon is at (310) 363-4910 and Moore at (310) 363-4909 in California. Young can be reached at (602) 735-5576, Brabant is at (602) 735-5555, Smigiel at (602) 735-5604, and Abraham is at (602) 735-5240. Francis should be contacted at (602) 735-1781. For leasing information contact Krewsone at (602) 474-9551, Coppola at (602) 954-3762 or Cheney at (602) 954-3769.
