Papago Spectrum Sale Encounters Challenges

PHOENIX-When GLL Real Estate Partners recently paid $21.6 million to acquire the 159,764-square-foot Papago Spectrum as part of a CMBS package from special servicer C-III Asset Management LLC in Irving, TX, the German buyer received a class A, multi-tenant building that was 91% occupied. However, as Jones Lang LaSalle senior managing director Dennis Desmond tells GlobeSt.com, getting to the closing table was an interesting process.

“The entire process took about 18 months,” confesses Desmond, who partnered with JLL senior vice president Brian Ackerman to market the office building at 1225 W. Washingtonon behalf of the seller.  “An encroachment was uncovered.” The encroachment in question was an Salt River Project Power & Water (SRP) line running under the building. “It took a lot of doing to determine if a) it was live; b) it was secure and c) who should do something about it,” Desmond says.  Adding to the issue was that, during the process of determining responsibility for the power line, the servicer that had hired JLL was sold to another servicer, further muddying the waters.