TEMPE, AZ-An El Paso-based company, looking to consolidate three Phoenix-area offices due to a merger, has signed what its brokers claim is one of the three largest office deals for 2007 in the Greater Phoenix market. Western Refining Inc., which acquired Scottsdale-based Giant Industries Inc. at the end of May, signed a 10-year lease for 70,000 sf of class A office space.

Larry Downey and Jerry Jacobs, executive director and senior director, respectively for Cushman & Wakefield of Arizona Inc. in Phoenix, represented Western Refining in the transaction for 1250 W. Washington St. The brokers would not reveal the final rent, but the asking rate in the 96,000-sf building is $27 per sf annually, which would give the deal a total value of about $17.5 million. The average rent for class A space in the Tempe submarket is $25.67 per sf, according to the third-quarter report from Grubb & Ellis Co.

The building, completed in November, is phase three of Papago Buttes Corporate Plaza, a 436,996-sf complex developed and owned by Principal Global Investors of Des Moines and Phoenix-based Metro Commercial Properties. The first two phases are fully leased. Michael Beall, Kathy Gibbs and Chris Walker, also with Cushman & Wakefield, represent the owner of the complex, which is in the 522-acre Papago Park Center business park.

Downey tells GlobeSt.com that he showed 20 buildings in various Phoenix submarkets to Western Refining’s executives during the course of the space search. “It was very competitive,” he says. “This is a major corporate tenant that is essentially new to Phoenix and in an expansion mode. Landlords were very eager to land this deal and competed aggressively to bring them in.”

Western Refining settled on Papago Park, Downey continues, because the building would give it a strong identity and presence in the market. The option to expand into rest of the building in the future also played a major role, he says, as did the availability of parking and the location close to Phoenix Sky Harbor Airport.

The tenant will vacate the former Giant Industries headquarters at 23733 N. Scottsdale Rd. It also will vacate space in buildings along Black Canyon Highway in Phoenix and Mesa. All three properties have time remaining on their leases. Downey and Jacobs are marketing the spaces for sublease.

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