AmeriVest Staging Back-to-Back Buys for Arizona Inroad

AmeriVest president Charles Knight tells GlobeSt.com that a second office building buy should close in December and a third property could go under contract by year's end. The Phoenix market is high on AmeriVest's radar screen due to its fast growth and popularity among small-size tenants, an AmeriVest target audience.

"We've been wanting to get into Phoenix for a long time," Knight says. AmeriVest is eyeing properties classified class A and B.

AmeriVest says it bought Arrowhead Fountains at a first-year cap rate of more than 10%. The deals calls for $3.4 million in cash and assumption of an existing $9.3-million mortgage at a floating rate of LIBOR plus 150 basis points. The mortgage matures Dec. 5, 2003. The acquisition represents the first transaction from the proceeds of an AmeriVest common stock offering completed in late July, says William Atkins, AmeriVest chairman and CEO.

The class A property was developed by Newport Beach, CA-based Koll Development Co. It fronts Loop 101 and south of Bell Road in one of the region's fastest-growing metro sections. Arrowhead Fountains Office Building, situated on five acres, is part of a 95-acre, mixed-use development that abuts the Arrowhead Towne Center regional mall in the northwest submarket.

AmeriVest Properties caters to small to mid-size tenants in select markets. The average tenant size at the three-year-old Arrowhead Fountains is 4,156 sf. The roster includes some of the biggest names in the financial industry and bears a lease rollover of just 3.8% in 2002. Tenants include Charles Schwab, Salomon Smith Barney, Robert Half International, Dain Rauscher, Wells Fargo Home Mortgage and Employers Mutual Casualty Co.

Part of the take-over plan calls for adding amenities found at other AmeriVest properties–aimed at beefing up the occupancy. That, says the company, will start with a common conference room and electronic building directory.