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PHOENIX-Pacifica Real Estate Group has taken ownership of a three-story, 142,667-square-foot office building that has University of Phoenix as the main tenant. The Santa Barbara, CA buyer paid $18.8 million to Principal Real Estate Investors for the 94%-leased building.

Seller representative Chris Toci, executive director with Cushman & Wakefield of Arizona Inc. tells GlobeSt.com that the University of Phoenix uses the building as a mission-critical data center. The office structure at 2550 W. Union Hills Dr. is on the Arizona Public Service power grid, while University of Phoenix’s main campus near Interstate 10 and Broadway Road has Salt River Project as its power supplier. If the main campus has a blackout or loses data power, the Union Hills building provides adequate energy and backup power to ensure no data is lost.

University of Phoenix as the lead tenant was attractive to the buyer, notes Toci, who teamed with C&W executive director Mike Beal on behalf of the seller. “They essentially have an asset with no near-term roll for the next five years and a very strong tenant roster,” Toci comments. “They liked the per-pound pricing, the yield and the location. What we’re finding with buyers these days is they don’t want to be saddled with a lot of lease-up risk. They want the stable cash flow, and this asset fit the profile for that.”

Meanwhile, Principal Real Estate Investors was happy with the buyer because of a previous relationship. Additionally, Pacifica Real Estate Group has University of Phoenix as a tenant in other buildings owned in other states, Toci remarks.

As to why Principal Real Estate Investors decided now was a good time to sell the two-year-old building, Toci explains the action is typical of large institutional investors who consistently balance their portfolio. “This was a portfolio realignment,” he adds.

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