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SCOTTSDALE, AZ-A private investor from San Diego has acquired a 43,368-sf medical office building to satisfy his 1031 exchange and free up a local seller to do the same. The medical property has brought $9.2 million in off-market transaction.

Kent R. Greenwald, senior vice president for Coldwell Banker Commercial NRT in Phoenix, says the seller of record, Town Lake Enterprises LLC, wanted to exchange the medical building at 8010 E. McDowell Rd. for a single-tenant, triple net-leased industrial property in the area because it required less maintenance. “At the same time, I had a client who’d sold a mini-storage in San Diego and needed the trade,” says Greenwald, who represented the buyer, SSS-Scottsdale LLC. The seller’s broker was Steven Schnitzer, also a senior vice president for Coldwell Banker Commercial NRT.

Greenwald tells GlobeSt.com the buyer liked the 22-year-old building because of its 98% occupancy and the fact it’s a medical asset so its tenants aren’t going to leave any time soon. “The upside is the lease roll over the next year as the rates are slightly below market,” Greenwald adds. The largest tenant is Phoenix Therapeutic Massage College. The buyer will manage the asset.

The asset “generally remains full,” Greenwald says, adding it’s “in a great location.” It is located in the near southeast submarket of the city, less than one mile from Loop 101 corridor.

The building originally was the headquarters for Gordon Hall, one of the founders of 24-Hour Nautilus, 24-Hour Fitness Worldwide Inc. Greenwald says from the late 1980s on, it was a multi-tenant investment property, swinging to medical uses in the 1990s.

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