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GILBERT, AZ-Duke Realty Corp. has paid $12.7 million for 19.4 acres to develop two spec office buildings, totaling 218,000 sf, and five acres of retail. El Dorado’s first phase is a 109,400-sf, three-story office building that will break ground in May.

The developer plans to deliver the first phase in March 2009. Michael Freret, senior vice president in Phoenix for the Indianapolis-based developer, says the second phase will be a twin, but its groundbreaking will be purely market driven.

Freret tells GlobeSt.com that Duke has an option with Ty LeSueur of Gilbert to buy another 20 acres just south of the site at Val Vista Drive and Willis Road. That land could support two more office buildings, each about 110,000 sf. “We’d like to eventually make that a four-building corporate destination,” Freret says.

As for the retail component, the developer is planning outparcels for uses complementary to the business park. “We anticipate selling the outparcels to corporate-friendly users or developers,” he says.

The architectural firm of Davis in Tempe designed El Dorado. A CB Richard Ellis team in Phoenix will lease it. CBRE executive vice presidents Thomas F. Adelson and James B. Fijan and senior vice president Kevin Calihan brokered the land transaction between LeSueur and Duke.

Freret says El Dorado will be able to accommodate tenants requiring as little as 2,000 sf. However, he adds that “the large floor plates are likely going to be more attractive to larger corporate users that want to take advantage of Gilbert’s growth and large employment pool.”

As Duke begins work on El Dorado, Freret says site reviews are underway for land in the northwest, southeast and Scottsdale to develop additional office and industrial buildings in the coming year. Meanwhile, preliminary plans are in place to build an industrial building in Goodyear.

Freret says Duke continues to be bullish on the Phoenix market and intends to increase its local portfolio. “We want to grow out here, but we want to be smart about it,” he says.

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