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PHOENIX-A Southern California buyer won ownership of a three-building office complex, beating out several other bidders for the asset. The class A office assets, totaling 432,592 sf, sold for $96 million in an all-cash deal.

The closing of Scottsdale-based CMD Realty Investment Fund IV LP led to the disposition of Gateway One, Gateway Two and Gateway Three on 44th St. Bob Young, first vice president with CB Richard Ellis Inc.’s Phoenix office says Transwestern Investment Co. of Los Angeles offered a substantial deposit and a short due diligence, which helped it stand out from other bidders.

Seller representative Young tells GlobeSt.com that the 25-year-old complexes are the first assets to be sold from Fund IV, and other closings will soon follow. The Fund’s portfolio includes properties in Arizona, Texas and Florida.

Young explains that CMD managed the property for the most part, but prior to the sale, the asset manager left, so CBRE ended up with the temporary leasing and management assignment until closing. Transwestern will take on those activities, which Young says wasn’t surprising. “They typically do their own leasing and management,” he adds.

He adds that the 87% occupied portfolio, which underwent renovation in 2002 and 2003, has plenty of upside potential. For one thing, the investment Transwestern made is well below replacement cost.

“The largest tenant in there is United Healthcare, and they’ve downsized, creating more vacancy,” Young adds. “Within the next year, we’re looking at about 25% of the building rolling as part of the downsizing, which will allow them to get the rates to market.”

The portfolio consists of Gateway One; a four-story, 107,654-sf building at 426 N. 44th St.; Gateway Two; a four-story, 107,624-sf building at 432 N. 44th St. and Gateway Three, an 11-story, 217,314-sf building at 410 N. 44th St. CBRE’s first vice presidents Glenn Smigiel and Steve Brabant, vice president Rick Abraham, first executive vice president Jim Fijan and senior vice president Jerry Roberts worked with Young on behalf of CMD. Transwestern was self-represented.

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