Pension Fund Adviser Lands $10M to Fund Office Complex Buy

Great Point Investors LLC is planning a long-term hold of the 96%-occupied complex at 1900 W. University Dr. "Their investors with Great Point like to be in deals anywhere from five to seven years' hold time," says Sean McKenna, director of CBRE/Melody's Boston office, who brokered the debt through Allstate Life Insurance Co. of Northbrook, IL.

The two buildings, completed in 1989, were sold by Castle & Cooke North American Commercial LLC of Kannapolis, NC through CB Richard Ellis Inc.'s Phoenix office. The lead tenants are Phelps Dodge Corp., an Amcor Sunclipse of North America distribution location and a local office for Ikon Office Solutions Inc.

McKenna tells GlobeSt.com that lease rollovers had been a concern while the deal was being finalized, but Great Point was negotiating extensions and renewals with tenants prior to closing the acquisition. "Once the property closed, they were able to agree to deals that increased the property's value," he adds.

The seven-year, fixed-rate interest financing, with a 65% loan-to-cost ratio, has interest-only payments for the first 2.5 years. Then, it converts to a 30-year amortization schedule. The interest rate isn't being disclosed, but the standard for comparable loans ranges from 5.25% to 5.65%.

McKenna says the loan was fairly straightforward and easy to place, with the closing proceeding smoothly. "All parties had done business in the past with one another and knew one another," he explains.

McKenna says Great Point, which had an in-house broker negotiate the purchase, has an eye peeled for additional properties in the area. "This is their first acquisition in Phoenix," he says, "and they're looking at other deals throughout Phoenix and the Southeast."