Terra Verde One

[IMGCAP(1)]SCOTTSDALE, AZ-In a truly unique setting, Desert Troon Cos. has jumped into construction on a $139.5-million class A office project surrounded on three sides by the TPC Desert Golf Course in North Scottsdale. Site work is under way on the first of three office buildings and a 1,600-space underground parking garage.

Desert Troon expects to spend the next four months readying the 17.2-acre site at Loop 101 and Bell Road, including excavating and building two subterranean parking levels that will connect all three office structures. First to rise will be a 183,984-sf three-story structure. The Scottsdale-based developer plans to add 157,585-sf and 120,572-sf buildings, each with views of different golf course holes.

Desert Troon acquired the site roughly 18 months ago from Houston-based Hines. “It was always planned for office development,” says Tim Whittemore, senior director of Cushman & Wakefield of Arizona Inc. “It just happened to sit in the middle of a TPC golf course.” C&W sold the dirt to Desert Troon and got the leasing assignment as a result, according to Whittemore, who had a hand in the sale.

Terra Verde One will come out of the ground as spec, but there already are would-be tenants milling about. “We’ve been very happy, particularly at this point, to have the activity that we’ve had,” Whittemore tells GlobeSt.com. “Based on some activity we have right now, that may expedite phase two.” The developer began prepping the site last month. Terra Verde One will deliver in summer 2009.

The Scottsdale Airpark submarket has a 6.2-million-sf office inventory, of which 5.2 million sf is class A. Vacancy is 13%. Whittemore says Terra Verde’s uniqueness will let it outperform its peers. Not only is it golf course-anchored with views of McDowell Mountains, but Terra Verde has the largest parking area and possibly the largest floor plates in the submarket. And, the first spec building fronts Loop 101, setting up a marquee presence for a lead tenant.

“Terra Verde offers corporate users more of a corporate campus environment versus a single building here and a single building there,” Whittemore stresses. He is partnering with C&W senior director Michael Beall to lease the development, with first-year quotes at $30.50 per sf and annual bumps thereafter.

Whittemore says the target market is financial institutions, mortgage brokerage houses and law firms that account for a large percentage of the submarket’s tenant base. Nearby is a Marriott-flagged hotel, the Fairmont Princess Hotel and a handful of exclusive residential communities.

Butler Design Group of Phoenix designed the office complex, which was laid out with a 4.5:1,000 sf parking ratio in surface and subterranean areas. DL Withers Construction Inc. of Phoenix is the general contractor.