107,885-SF Office Building Rings Up $27M

Seller New Cities Land Co. of Monterey, CA bought the building at 8901 E. Mountain View Rd. in 2000 for more than $17 million, with a hot market dictating the current sale. According to Jim Fijan, executive vice president in CB Richard Ellis' Phoenix office, the seven-year-old building attracted 10 offers during a 120-day marketing period, three of which were rock-solid bids. "We liked the overall makeup of the buyer. The due diligence time was short and they liked the deal," Fijan says.

Lead tenant Wells Fargo has 45% of the space locked in to a long-term lease. Fijan says there are no lease expirations upcoming from any other tenants anytime soon. CBRE senior vice president Jerry Roberts, who teamed with Fijan to broker the sale, will be leasing Scottsdale Gateway II.

In terms of the asset's market presence, Phil Breidenbach, senior vice president with Colliers International Inc. in Phoenix believes that, while the seller made a nice profit on the Scottsdale Gateway II deal, the buyer also did well, given the growing scarcity of class A space in the market. "There are some buildings being developed out there, but demand is outpacing supply," he says. "If demand continues to outpace supply and the costs of doing business and construction go up, this thing can do nothing but improve."

Fijan says the sellers have one other building in the metro area, the 140,000-sf Gainey Center I at 8601 N. Scottsdale Rd. in Scottsdale, but it's not on the market. Meanwhile, the Pollack Family and Granite Capital continue to search for more assets, both through their joint venture and separately. Fijan says Granite Capital is holding a multimillion-dollar contract for two shopping centers and an office building. "They're interested in seeing more opportunities and continue to be active buyers in the market," he says.