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PHOENIX-The United States Citizen and Immigration Services has become the first major tenant to take space in Yourland, a mixed-use redevelopment near Sky Harbor International Airport. The government agency has taken down 50,000 square feet through a 15-year lease, making it the anchor tenant for the 90,000-square-foot first phase.

The lease, which carries a total consideration of close to $16 million, will commence in Q1 2010 or “when we can complete the space,” comments Mark C. Stratz, senior associate with Grubb & Ellis/BRE Commercial LLC’s Phoenix office, who negotiated the deal on behalf of local property owner and developer Martha + Mary. As of now the space at 1501 Buckey, the former site of the original Smitty’s Supermarket, is in shell condition.

“The developers have done all of the abatement inside, and part of the federal government requirement is that the space be LEED certified,” Stratz says. “The space will be renovated with LEED standards, in hopes it’ll include solar and other renewable energy sources for the long term.” Immigration Services’ main facility is at 2035 N. Central Ave., and Stratz says the lease will involve relocation as well as a consolidation with other area units.

Working with Stratz on the transaction were local Grubb & Ellis/BRE Commercial’s senor associate Tyler T. Wilson and senior vice presidents Michael C. Haenel and Andy W. Markham. Julie Stoner with Jones Lang LaSalle’s Denver, CO office represented the tenant.

The Yourland developer, headed by Sloane McFarland, will eventually build the project out to 1.1 million square feet, which would encompass an entire 20-acre site. The estimated cost for the first-phase renovation and land preparation for the remaining project is approximately $20 million.

McFarland is a visual artist who comes from a background of real estate: his grandparents bought the 20 acres 90 years ago. “We thought given the land’s proximity to Sky Harbor, downtown Phoenix and the new light rail, we saw we were in the path of progress, and felt there was a good opportunity to do a very special project there,” McFarland comments. The project is commencing with renovation of the 90,000-square-foot existing structure, which already hosts the Welcome Diner, a restaurant.

McFarland tells GlobeSt.com the remainder of the development will be ground-up, based on demand. The tenants he’d like to see there include a cross-section of office and retail, with focus on very local business and arts development.”Our game plan is to develop this as the need arises,” he adds. “We like to say we’ve owned this for 90 years, and are planning it for the next 90.” Gensler’s local office is coordinating the project’s design and Phoenix-based Kitchell is the general contractor.

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