Scottsdale Promenade Fetches $18M

The 85%-leased development contains 117,357 sf of retail and 22,601 sf of office space set at the northeast corner of 70th Street and Shea Boulevard or as the brokers say "at the Main and Main cross streets" of North Scottsdale. The Orange County pension fund, advised by CB Richard Ellis Investors of Los Angeles, sold the holding because "the timing was right and they wanted to change out the portfolio," says Bob Pearlstein of CBRE's Phoenix office and the six-year leasing agent for the asset. "The way cap rates are right now, the general mood of the market is that it's a good time to sell." And, he says, the holding traded right where he and CBRE's Steven Brabant believed it would.

The new owner, ALRO Investors, put the high-profile property under contract in July and closed the deal at the end of December. ALRO, placing new debt to make the close, will lease and manage the purchase, a mix of local and regional tenants. "One of the selling points," Brabant tells GlobeSt.com, "is how long these tenants have been there...It's the busiest intersection in Scottsdale and an area that retailers really want to be in."

Scottsdale Promenade was built in phases, 1986 and 1989. Throughout the years, the property has been reconfigured, parking added and landscaping upgraded, but it's not needed a major overhaul. The brokers say its location and well-maintained condition drove high interest, even from buyers with an appetite for grocery-anchored retail but not necessarily mixed-use product.

Besides Brabant and Pearlstein, the seller's CBRE team included Bob Young, Glenn Smigiel and Rick Abraham. Ron Finkel of RBI Scottsdale represented ALRO Investors.