$2M Offer Ends Scottsdale Airpark Bidding War

"It got into a bit of a bidding war," Tim Rios with Marcus & Millichap's Phoenix office tells GlobeSt.com, referring to the competitive angling that ended in the building's sale during its first listing day. Six bidders drove up the price on the 13,150-sf industrial bidding by $35,000 within 24 hours, pushing the original $2.02 million price tag to $2.06 million.

"I think it was well priced," Rios says about the initial sales offering, "but properties in this price range with long-term leases are not easy to come by in the Scottsdale Airpark. A number of brokers had investors looking for this type of property so it came down to which buyer could step up with the best price and terms."

The buyer who stepped up was Dr. Patrick Bitter Sr. of Phoenix, an investor who was looking for a passive investment in a good location. "This was ideal for him," Rios says.

What made the deal exceptional was not only the property's location in one of the hottest submarkets in the Valley, but a 15-year lease that the seller had signed before putting it on the market. With the sale, the former owner now becomes the property's sole tenant at a lease rate of $12.30 per sf.

Rios says seller Howard Baer purchased the 7740 E. Evans Rd. property last summer when it was 60% vacant, made some capital improvements and leased it to a cabinet maker and an insurance company. He filled the balance with his business, Health Enhancement Supplements Inc. Rios says Baer decided to take over the entire building for his health products business, then inked a 15-year lease and put it on the market in a move that allowed him to capitalize on his equity.

"It was a win-win situation for both parties," Rios says. "For the buyer it had a good return and met all his investment criteria and it met the seller's goal of funding additional capital for his business."

Rios teamed with Marcus & Millichap's Ray Fontaine in Phoenix to represent the buyer. Todd Trickle and Erik Marsh, also in the brokerage firm's Phoenix office, bargained on behalf of the seller.