State Finds Interest Strong for Sale-Leaseback

PHOENIX-The state of Arizona’s plan for the sale and long-term leaseback of its 205,901-square-foot State Capitol Executive Tower here is attracting interest from investors. Located at 1700 W. Washington St., the estimated $40-million building was built in 1974 and houses the state’s executive offices, including the Governor’s office, as well as the secretary of state and the state treasurer. The asset sale is one among many that are planned to balance the state’s budget, which is $3.2 billion in the red.

Alan Ecker, a spokesman for the Arizona Department of Administration this week told the New York Times that potential buyers were calling “from all over the country.” Ecker estimated that his office has received 60 inquiries since Gov. Jan Brewer approved the sale and 20-year leaseback on Sept. 3 as part of a still-unresolved budget plan.

“There are a lot of empty buildings around these days so a fully leased building in this environment is attractive, and it is going to be extremely competitive,” Lee Hunter, a principal of H&W Development, a developer in Mableton, Ga., that is considering buying the asset, told the newspaper.

To help shore up the budget state lawmakers also approved the sale of buildings that house legislative offices in addition to 10 prison complexes, a state mental hospital and other buildings. Including the executive office tower the assets are valued at approximately $735 million. According to the plan, the state would get the value up front in exchange for paying out twice that much to lease the buildings for 20 years before the ownership reverts back to the state.

To read about the program on the state’s Website and access a list of the buildings slated for sale as well as the enabling legislation, click here . For the full New York Times article, click here .