PHOENIX-A group of investors has acquired the fifth building in a complex, divvied for sale, along a sought-after stretch of East Camelback Road. The 22,776-sf structure, the second smallest in Biltmore Lakes Corporate Center, has brought $4.2 million.

Seattle-based Biltmore Lakes Associates LLC bought a 23-year-old building with a 95% occupancy. The buyer holds numerous apartment properties in the Phoenix area, but is venturing into the local office market for the first time with the Biltmore acquisition.

The seller is a local liability company run by Los Angeles-based real estate investor Larry Clark, who has been piecemeal selling the six-building, 207,270-sf complex since its acquisition in July 2003. Clark, who bought the complex at 2920-3030 E. Camelback Rd. from Chicago-based CMD Realty Investors Inc., purchased it with the intention of dividing the 13-acre development for individual sales, sources say. The land is treated as common area, which is divided proportionately among the six buildings, as a result of the subdivision for resale, according to CB Richard Ellis broker Jim Fijan, who has been marketing the properties and the seller's broker for the most recent transaction. The buyer was represented by local Hendricks & Partners brokers Mark Forrester and Bob Bruno.

The buildings have sold, one by one, for an average of $185 per sf, Fijan tells GlobeSt.com. A 79,405-sf building at 3020 E. Camelback Rd. is the last one and the largest of the group.

Dimension Financial & Realty Investments took 2920 and 2930 E. Camelback Rd.; an undisclosed pension fund bought 3010 E. Camelback Rd.; and Oklahoma City-based MidFirst Bank acquired 3030 E. Camelback Rd. for a branch and office facility.

The seller's strategy to buy, subdivide and piecemeal sell was generated by the corporate center's location, says Steve Posluszny, a locally based senior vice president at GMAC Commercial Mortgage Corp., which is providing $3.4 million in acquisition financing to the Biltmore Lakes Associates buyers. The buildings are on the desirable north side of Camelback, abut a lake and are part of the Arizona Biltmore Golf Club, with views of Camelback and Squaw Peak Mountains. "You're talking about some of the most valuable real estate in metro Phoenix," Posluszny says, adding GMAC is financing two more buildings in the group although he declined to elaborate.

The buildings are all rented at a current asking rate of $23.50 per sf, according to Posluszny, who says the Seattle buyer is planning a medium- to long-term hold of the property. The corporate center's overall vacancy is about 29%, according to CBRE marketing materials.

According to Posluszny, some buyers have indicated that they may, in the future, add more floors to their building to take advantage of the valuable location in the Camelback corridor. "The buildings have underutilized the sites," he says. "The zoning permits more than what they are doing. You have a four-story commercial zone [but] you could put a six-story multifamily complex in. If you were to do a condo in metro Phoenix, this would be one of the best locations you could ask for."

Fijan, however, says that it is five to 10 years before any plans materialize to either tear down and rebuild or expand the properties. "It is low-density on the site," he acknowledges, "but I think that's down the road." He also says that at some point, a buyer may come along to reassemble the buildings into one parcel, tear them down and "redevelop the entire site." As for the remaining building in the package, 3020 E. Camelback, it is still being marketed at $175 per sf or about $14 million, says Fijan.