"This is a class A property that has a history as one of the nicest buildings on that corridor and we were fortunate enough to buy it below replacement cost," Equus president and CEO Chad Carpenter tells GlobeSt.com. He says Equus acquired the 75%-leased building through an affiliate after beating out 20 to 30 other prospective buyers to take ownership from SOFI Fund IV, an affiliate of Starwood Capital.
Carpenter says SOFI Fund IV paid $22 million for the building about seven years ago and added another $4 million in improvements, including renovations to the building's roof, elevator controls, fire system and cooling towers. Equus plans to continue that three-year improvement program by upgrading common areas, including lobbies.
The acquisition gives Equus 540,000 sf of office space in the city's Downtown North submarket. The firm also owns 202 E. Earll St., a 93,000-sf office project, and Valley Commerce Center, a 240,000-sf office building, and plans to acquire another $50 million in Arizona real estate in 2004.
"Equus is very bullish on Arizona," Carpenter says. "One of the reasons we bought this building is because we are targeting that market as a market we would like to buy a lot more in. We believe that in the next three to five years, that submarket will come back and as it fills in, rents will be pushed up, hence values will be pushed up."
Rob Rizzi of New York City-based Broad Street Advisors represented the seller in the transaction. Equus was self-represented in the deal.
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