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TEMPE, AZ-Matthews Real Estate LLC makes its first acquisition in the Valley, dropping nearly $11 million for Mill Towne Center, an 83,757-sf, office and retail project near Superstition Freeway.

The Irvine, CA-based Matthews Real Estate used 1031 exchange funds to acquire the property, which consists of eight single-story buildings and a pair of two-story structures. The seller was ICP 400 LLC and ICP 800 LLC of Scottsdale, which bought the property in 2002 for $8.5 million.

Matthews Real Estate beat out more than 10 other buyers to gain possession of Mill Towne Center, situated at 101-235 E. Baseline Rd. on 8.3 acres in south Tempe along the Superstition Freeway. "The freeway is really the backbone of [the project]," says Eric Wichterman, a senior vice president with Grubb & Ellis/BRE Commercial LLC who represented the seller along with Stan Shafer and Jeff Hartland.

Wichterman tells GlobeSt.com that the 19-year-old Mill Towne Center, which is 86% leased, is a stable investment with potential. "There's some opportunity that exists with the lease up," he says. The roster includes a mix of local and regional firms including US Egg Restaurant and Ultimate Fitness Center. The quoted rent is $16 per sf to $20 per sf, triple net.

According to Wichterman, Mill Towne Center does not need any improvements. "It recently underwent a renovation by the previous owners," he adds.

Matthews Real Estate assumed a $7.3-million loan held by Solomon Bros. The loan, due in February 2008, has an interest rate of 5.3%. Mike Munger with Roseville, CA-based TRI Commercial represented the buyer.

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