The building is one of the last assets in Fiesta Tech Center that Hewson has brought to market. It sits on 5.2 acres at 1405 N. Fiesta Blvd. in the 60-acre corporate park. Joseph H. Porter III with CB Richard Ellis in Phoenix says the building was finished in 2001 and partially leased to Spectrum Astro Inc., which was eventually sold to General Dynamics Corp. of Falls Church, VA.
"This was initially designed to be a multi-tenant facility and General Dynamics eventually took the whole building over," says Porter, who along with CBRE senior vice presidents Patrick J. Feeney Jr. and Daniel P. Calihan represented the seller. Newport Beach, CA-based Koll's acquisition manager Bill Larkin handled negotiations for the buy side.
Porter tells GlobeSt.com that, despite the seven offers, the building was a difficult sell to would-be buyers because General Dynamics had only 34 months left on its lease. "The buyer liked the building because the cap rate was good based on lease risk," Porter explains. "The tenant is pretty secure there too."
Porter adds another benefit for the buyer was an assumable mortgage that carried a mid-5% fixed-rate interest. Not only did the buyer show a lot of interest in the asset from the first day, but Porter says Koll/PER also made the highest offer.
Koll/PER has ended up with one of the last assets for sale in Fiesta Tech Center. Porter says there is one vacant lot in the park that's owned by a user, who plans to sell the land or use it for a build-to-suit. "Everything else is built out," Porter says. "Hewson owns about 150,000 sf of space in the park. They keep it leased up and plan on maintaining that ownership." He says the building was put on the market because Hewson and New York City-based Guardian Life Insurance were dissolving their partnership.
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