$12M Off-Market Deal Nabs 155,487-SF Office

Situated on eight acres at 3838 E. Van Buren St., the complex consists of a 101,137-sf 10-story building, 26,997-sf three-story design and 27,353-sf two-story structure. The two-story and 10-story buildings were vacant. Mesa Air Group Inc. occupies the three-story building in a lease that expires at the end of October 2008. The buildings went up in the late 1960s and early 1970s and underwent renovations during the mid-1990s.

According to Chris Ackel, senior associate with CB Richard Ellis' Phoenix office, Equus has had its eye on the property since Brookfield acquired it as part of a larger portfolio two years ago. "We thought we had an agreement last year to buy it from them, then they decided to keep it," he says.

Ackel says the Toronto-based Brookfield didn't have a lot of motivation to sell because it was still receiving cash from the 10-story building, which was leased to locally headquartered Cendant Corp. until March 31. "We closed right after that and got a vacant building, with a reduction in price," Ackel says. Cendant had moved out last year.

Ackel tells GlobeSt.com that two potential users, a hotel group and an office tenant, are interested in Gateway's 10-story structure. "The hotel company feels very strongly that, based on the location, they can realize something in the neighborhood of $119 room rate and 70% occupancy," he explains. "But the potential tenant wants all 10 floors. So, we have two options."

Ackel says Equus will decide within a few weeks which direction to go. In the meantime, the vacant two-story building will be offered for lease at $19 per sf, full-service contingent upon the tenant-improvement allowance. CBRE is leasing the building.

CBRE first vice president Pat Horan teamed with Ackel on behalf of the buyer. CBRE first vice presidents Bob Young, Glenn Smigiel and Steve Brabant and vice president Rick Abraham represented Brookfield.