A trophy office building in the Camelback Corridor in Phoenix sold for $86M this week in the market’s largest single-building sale of the year, the Phoenix Business Journal reported.

The 10-story, 222K SF Class-A property, called Esplanade III, was purchased by Southwest Value Partners. An LLC connected to Transwestern and C-III Capital Partners was the seller, represented by JLL brokers, the PBJ reported. The partnership acquired the building in 2019 for $60.2M.

Esplanade III is just one building in the 1.3M SF mixed-use Esplanade campus, which also houses Esplanades I, II, IV and V, co-owned by Monarch Alternative Capital and Tourmaline Capital Partners. The campus was renovated in recent years.

Esplanade III is reportedly 83.4% leased by tenants including Vanguard Realty Advisors, Barclay Group, Velocity Retail Group, Husch Blackwell and Pederson Group.

The biggest multibuilding office sale so far this year in Phoenix was that of the 628K SF former University of Phoenix property, which LXP Industrial Trust acquired for $103M in May.

In 2024, the 24th at Camelback II tower set the record for the largest overall area office sale, selling for $97.9M, and the adjacent 24th at Camelback I sold for $86.1M.

“What we're seeing across Phoenix and the broader Sun Belt is sustained demand for Tier 1 and Tier 2 office product in best-in-class locations like the Camelback Corridor,” Will Mast, managing director for JLL Capital Markets, told the PBJ. “There is meaningful capital flowing to these assets, and this transaction reinforces that conviction.”

Phoenix’s office leasing activity reached approximately 1.1M SF in the second quarter, up from 924K SF in the first quarter, according to CBRE. Tenants leased 92K SF in the Camelback/Piestewa Peak submarket. Growth in this space was largely driven by Class-A properties, according to Cushman & Wakefield.

Southwest Value Partners, which has headquarters in Nashville and San Diego, acquired seven other office buildings in Phoenix last year, spanning more than 1.5M SF, in a $296M deal with Canadian firm City Office REIT Inc. The company also owns a four-building office complex in Tempe.