PHOENIX-The Buzz Oates Building, built 2.5 years ago, has been acquired by Lincoln Property Co. for $30 million or $54.50 per sf. The 552,360-sf distribution center is leased to Home Depot Inc., which has less than five years remaining on its lease.
According to senior vice president Bo Mills with Trammell Crow Co.'s Phoenix office, the off-market transaction was fairly straightforward, with a quick due diligence and four-day escrow period for the 7037 W. Van Buren St. asset. "There were a few other groups chasing this on an unsolicited basis, but Lincoln was qualified, they pursued the deal diligently and aggressively and they got it," adds Mills, who brokered the transaction with TCC senior vice president Mark Detmer. Local developer Buzz Oates Enterprises was the seller.
Mills says part of the property's appeal was more than its tenant. "The price the seller wanted is actually below replacement costs in today's market," he explains to GlobeSt.com. "We continue to see construction and land prices escalate so to buy a first-generation building at yesterday's prices was a great opportunity for the buyer." He adds that, with tenant improvements and soft costs, a comparable ground-up building would cost about $55 per sf to $60 per sf.
Furthermore the building is situated on a 33-acre tract. With the distribution center covering 22% to 25% of the acreage, more expansion is possible. "Right now, they'll hold the property and watch it appreciate," Miller adds. "This was a great deal for the seller and the buyer was happy with the price."
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