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PHOENIX-Age and upside potential were the prime factors behind the 175,225-sf Deer Valley Office Park acquisition. A California joint venture has plunked down $36.6 million to add the two-building property to a growing portfolio.

Situated on 10 acres at 20410 and 20430 N. 19th Ave., Deer Valley Office Park offered Birtcher Anderson Realty LLC and Los Angeles-based Pacific Coast Capital Partners LLC the opportunity to acquire a stabilized class A complex from International Capital Partners of Scottsdale. “It was one of those perfect storm types of situations. The original builders were trying to lease it up, but the submarket had been soft. So relative to rents today, they had to give space away,” Robert Anderson, CEO of the San Juan Capistrano, CA-based Birtcher Anderson Realty, tells GlobeSt.com.

Anderson says there are 2.5 years before leases begin to roll, meaning an attractive near-term cash flow and appreciation potential. He adds that the current rents are about 20% below market value. There’s also opportunity for additional construction although Anderson says nothing is planned right now.

The complex was constructed in 2001. “The owners did a great job of maintaining it,” Anderson says. “We were pleasantly surprised by the condition of the building systems.” he says.

Birtcher Anderson Realty is no stranger to the Phoenix area. A little more than a year ago, the company bought a 229,220-sf, four-building office portfolio in the Arizona Business Park near Bell Road off Interstate 17. As the company looks for more acquisitions in the Southwest, Anderson says there’s a closing looming in the near future for another office building in the metro.

Bob Buckley, Tracy Cartledge and Steve Lindley with locally based Grubb & Ellis/BRE Commercial LLC brokered the transaction. A leasing company has not been selected for the property, but the new owner’s local arm, Birtcher Arizona LLC, did take the management reins with the closing.

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