The deal represents the area's third highest retail sale in 2008. In recent weeks, Shops at Chauncey Ranch at 8868 Raintree Dr. traded hands for $66.2 million while the 1.1-million-square-foot Scottsdale Pavilions at 9175 E. Indian Bend Rd. sold for $88 million to De Rito Partners Development Inc. of Phoenix.
The reason for Shops at Zocallo's attractive sales price is its location at 15405-45 N. Scottsdale Rd. The center is catty-corner from Los Angeles-based Macerich Co.'s 450,000-square-foot Kierland Commons lifestyle center and across the street from the under-construction, mixed-use 600,000-square-foot Scottsdale Quarter.
"There are a number of upscale retailers at Kierland Commons. We also think when Scottsdale Quarter opens next March, there will be a lot of synergy with Zocallo," says Brad Spies, an investment specialist with Sun Commercial Real Estate Inc. of Phoenix. The buyer's team also included Sun Commercial investment specialist Jason Miszuk and company founders Cathy Jones and Paul Miachika.
Spies says rents aren't quite as high at Shops at Zocallo as they are at Kierland Commons and Scottsdale Quarter. As a result, he says tenants wanting to get into the busy and growing North Scottsdale retail submarket would consider leasing space in the 90%-occupied Shops at Zocallo.
Spies points out that additional upside lies in some leases that will roll within the next year. He adds that renewal talks have already begun.
Spies tells GlobeSt.com that the buy is Emerson Properties' first in the Phoenix metro. He says the cash for the acquisition had been generated from a 1031 exchange from a land sale in Northern California. "They were looking for a stable investment in an area with a really good piece of real estate," Spies says.
Sun Commercial is going to lease the Shops at Zocallo for the new owner. Linda D. Stearman with Spectra Management Co. in Phoenix has the property management assignment. Ari Spiro, vice president with Sperry Van Ness' Phoenix office represented the seller.
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