Paragon, Wilshire Land $38M CMBS Loan for Phoenix Office Acquisition
Paragon Outcomes Management and Wilshire Capital Partners have landed a $37.5 million loan for their acquisition of 3900 Camelback Road, a 177,000-square-foot Class A Office property in the Camelback Corridor submarket of Phoenix, Ariz., Commercial Observer has learned.
Morgan Stanley provided the 10-year CMBS debt in a transaction arranged by Newmark Knight Frank’s David Milestone. The purchase price was not disclosed.
“We are excited to announce our acquisition of 3900 Camelback Center, which we expect to generate a strong cash yield with significant long-term asset appreciation,” Frank Tripoli, managing partner and chief investment officer of New York-based Paragon, said.
The deal marks Paragon’s second purchase in the Phoenix MSA. The private investment firm recently acquired 949 The District, a 154-unit garden style multifamily complex in Mesa, Ariz., alongside Westmount Realty Capital.
Phoenix’s educated workforce, business-friendly environment, high quality of life, and relatively low cost of living and conducting business continues to attract new employers to the market, diversifying the region’s employer base.
“Overall, the Phoenix market has strong fundamentals with considerable population and job growth and an overall business-friendly climate,” Tripoli said.
The three-story asset is a LEED gold certified, Class A office building that was developed by Ryan Companies in 2009. Today, it is 90 percent occupied to a roster of anchor tenants on long-term leases. The stability of the property, its strong sponsorship and the low-interest rate environment allowed Paragon and Wilshire to lock in attractive long-term fixed-rate financing for the acquisition.
“We are delighted to be teaming up with Paragon Outcomes on the acquisition of 3900 Camelback,” Scott Sorensen, managing principal of L.A.-headquartered Wilshire Capital Partners, said in prepared remarks. ”This acquisition gives Wilshire Capital Partners a strong presence in and exposure to a very exciting and attractive submarket. The strong tenancy and an enduring location along the Camelback Corridor should generate solid risk-adjusted returns and long-term value.”
Officials at Morgan Stanley couldn’t immediately be reached for comment.