SCOTTSDALE, AZ-Less than four years after the 258,312-square-foot Max at Kierland came online, developers Clarion Partners of New York City and Trammell Crow Co. of Dallas sold the office building to Artis REIT. The Canadian buyer paid $79 million for the office building, which was 90% occupied at the time of sale.

The six-story building at 16220 N. Scottsdale Rd. represented the first office partnership project between Trammell Crow and Clarion, and according to TCC senior managing director James Mahoney, the joint venture decided to put the office building on the sales block a year to 18 months before originally planned.

"A large amount of investment capital was put in place in early 2012 looking for high-quality investments," Mahoney notes, adding that there was also a shortage of high-quality office buildings being offered for sale in the western U.S. In other words, "there was a lot of money looking for a home, and not a lot of places to put it," Mahoney tells GlobeSt.com.

The broad-based marketing campaign, initiated by CBRE’s Barry Gabel and Mindy Korth in the firm’s Phoenix office, along with Kevin Shannon and Ken White in Los Angeles, attracted lot of interest; Mahoney says close to 20 people were interested enough to actually tour the asset. Artis ultimately won the context because of its track record and strong capitalization. Furthermore, "they'd shown an interest in the asset for some time, even before it was marketed for sale," Mahoney points out. "We knew it was the kind of property they wanted to buy."

According to a statement by Artis CEO Armin Martens, the class A office building represented a good opportunity to invest in markets offering quality assets at reasonable prices, with room for capital appreciation. “Today, competition for well-located real estate of this caliber in Canada’s major urban markets is fierce," Martens said in a press release. 

Mahoney says he wasn't surprised by Martens' comments, pointing out that properties similar to Max at Kierland located on the west coast of the United States would probably have sold at a higher price point. Such pricing differentials, he comments, makes investors wanting core assets to take a closer look at cities like Phoenix.

But the price paid for Max at Kierland was far from record-breaking. "I'd tell you that even for Phoenix, what Artis paid was about 10% to 15% less than what I'd characterize as peak pricing during the middle of the last decade," Mahoney says.