Equus Capital Partners and iStar have nabbed $43 million in financing from Mesa West Capital to acquire an office complex in Scottsdale, Ariz., according to an announcement by the lender.
RAIT Financial Trust, a New York-based real estate investment trust, sold the property, McDowell Mountain Business Park, to the joint venture for just over $53 million.
The complex’s two identical buildings stand at 16425 and 16552 North Pima Road, near the northeast vertex of Arizona State Route 101—a beltway that encircles Phoenix’s suburbs from the west to the city’s southeast. That location makes the property convenient for executives and junior employees alike, according to Jason Bressler, a vice president at Mesa West.
“This office is well located because it’s got a Scottsdale address,” Bressler told Commercial Observer. “Your decision-makers are living in the Northeast Valley, and so the people who are deciding [where to lease] see the opportunity to have an office close to home.”
Meanwhile, Bressler said, the site’s proximity to the major freeway means that workers could commute to McDowell in “half and hour or less from most parts of the city.”
The 256,000-square-foot office complex, completed in 2007, is 74 percent leased to tenants that include financial cybersecurity firm Early Warning Services and Health Dialog, a healthcare management company.
Detroit-based mortgage lender Quicken Loans employed 1,100 workers in its office at the business park until June, when it announced it would relocate its Arizona operation to the One North Central tower in downtown Phoenix. Even so, Bressler said that the purchasers were optimistic about future leases.
“Our strategy is to try to identify projects with good sponsors and good real estate, where you can see a good story” for the property’s prospects, Bressler said. He noted that the construction of more office supply in the Scottsdale area would be a continuing risk, but stated his belief that rents are not yet high enough to support additional development.
The complex exemplifies the Phoenix area’s continuing shift towards service-sector employment and land use. When construction began ten years ago, the site’s developer, Matrixx Management, had to rezone the 155 acres from their prior agricultural use, according to the company’s website.
Representatives from Equus, iStar and CBRE—the broker for the deal—were not available to comment.