$33M may be a big price tag to pay for a suburban Phoenix office, but Buchanan Street Partners says snapping up Stapley was all about replacement cost. (It's cheaper to buy used than new with buildings, cars, and futons.)
Buchanan Street's Brian Payne says it bought the two-building, 180k SF Class-A property from DESCO Group at a 20% discount than what it would have cost to develop similarly. (Plus you would've had to find somewhere to park a backhoe.) It's also got the benefit of stabilized cash flow at 90% occupied with tenants such as Wells Fargo and Cigna Healthcare. Cushman & Wakefield's Chris Toci and Chad Little brokered the sale.
Buchanan Street isn't the only buyer paying steeper prices in Phoenix. According to a recent C&W report, 2700 Corporate Center in Chandler (above) traded to WP Carey & Co for a whopping $236/SF, and even The Corporate at Pima Center in Scottsdale sold to CarVal Investors for a cool $50M, or $184/SF. The reports says price per SF is up 3% so far this year.
Brian says Phoenix is one of the handful of markets Buchanan Street is focused on for its investments: Others include Denver, California, and Houston. The firm is shopping for both value-add and core-plus office and industrial properties, especially in the Southeast Valley (where it purchased Cotton Center IV recently, above) and Scottsdale.
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