PHOENIX-The Shidler Group has bought the 226,700-sf Black Canyon Corporate Center in an off-market transaction with Hart Properties Inc. The San Diego-based investment group has anted up $24.3 million for the 70%-leased office building and extra land.

The just-sold property is the former Honeywell building, situated on 19 acres at 16404 N. Black Canyon Highway near Interstate 17. The deal included enough land for another 150,000 sf. “The two biggest upsides are leasing the last 30% as well as the market continuing to move,” says Jerry Noble with CB Richard Ellis who helped to lease the asset for the Bellevue, WA-based seller Hart Properties Inc. and will continue to do the same for Shidler.

Noble says Hart Properties had acquired the 26-year-old building from Honeywell about five years ago. He tells that Hart spent close to $4 million in 2005 to convert it from single tenant to multi-tenant office space. “They virtually gutted all the interiors. Everything was brought back to a shell building,” he adds. “They implemented a strategy to bring tenants to the building and were successful in getting two tenants.”

The 70%-occupied center includes major tenants such as Paychex Inc. and High-Tech Institute Inc. The going lease rate is $13 per sf, triple net with tenant-improvement allowances running from $30 per sf to $35 per sf, according to Noble, who teams with CBRE colleagues Patrick Devine and Todd Noel on the leasing assignment.

Noble says Black Canyon Corporate Center is well positioned to benefit from this year’s leasing environment based on what’s happening in submarkets directly south. “Squaw Valley and Camelback have seen vacancy declines in the past year.” he says. “As we continue to see vacancies in submarkets to the south continue to decline, tenants will move north.”

Hart Properties was represented by PM Realty Group. Shidler Group was self-represented.

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