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TEMPE, AZ-With the ink barely dry on two leases, SunCor Development Co. has passed the 300,000-SF Tower II at Hayden Ferry Lakeside to Sumitomo Corp. of America for $92.5 million. The buyer has used proceeds from the March sale of Phelps Dodge Tower to make the close.

Randy Levin, vice president of commercial and urban development and design for the Tempe-based seller, says SunCor’s MO is to sell its developments when they are 80% to 90% occupied. “We typically like to leave the buyer with a little upside in which they can have some lease-up of their own where they can add some value,” Levin adds.

Tower II at 60 E. Rio Salado Pkwy. had reached the 90% milestone with the combined takedown of 44,649 sf by Fidelity National Title Insurance Co. and MetLife Inc. Levin says Tower II’s tenant list impressed the New York City-based Sumitomo and other potential buyers.

Sumitomo used 1031 exchange money for the acquisition. “A portion of their equity came from the Phelps Dodge Building sale,” Christopher E. Toci, executive director for Cushman & Wakefield of Arizona Inc., confirms for GlobeSt.com. “They had a pretty big equity slug they were trying to redeploy in different areas including DC, Florida and certainly this deal.” Sumitomo pocketed about $128 million from the sale of the 409,889-sf class A Phelps Dodge Tower at 1 N. Central Ave. to Mitsubishi Estate Co. Ltd.

Toci says Sumitomo’s all-cash offer made it the clear winner. “We knew in this environment that someone seeking debt would be a difficult proposition,” he adds.

Levin says with Tower II sold that SunCor’s attention will turn toward development of the 250,000-sf Tower III. He says SunCor is trying to tie up some loose ends with major tenants for the class A space. He says the pending deals would put preleasing at close to 40%.

“Year-end will be when we likely break ground,” Levin says. He adds this year also could result in plans moving ahead for more residential units and a hotel in the 41-acre Hayden Ferry Lakeside project.

The C&W team included director Ted Harrison and analyst James Greaves. Also part of the disposition team were Lee & Associates principals R. Craig Coppola and Mark Seale and associates Chris Krewson and Andrew Cheney.

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