Columbus Properties has jumped into the Phoenix market with the purchase of a 309,400-square-foot office building for $86.1 million, 14 percent less than it traded for six years ago.
The New York-based investor bought the eight-story building at 2375 East Camelback Road, in the Biltmore area on the north side, the Phoenix Business Journal reported, citing Vizzda.
The seller was New York Life Insurance, based in New York. The price works out to $278 per square foot.
“It is our first venture in the Southwest but hopefully there will be others,” John DiMurro, president and managing principal at Columbus, told the Business Journal. Columbus Properties is a unit of Geschwister Oetker, a Germany-based group of global companies owned by siblings Alfred, Carl Ferdinand and Julia Oetker.
The Camelback property, developed in 2000 by Houston-based Hines on 8.5 acres at the corner of Camelback and 24th Street, is clad in green glass and Rosa Beta granite. A circular lobby is finished with Fiore del Pesco marble and bird’s-eye maple paneling.
It has 10,700 square feet of ground-floor shops and restaurants, including Scramble, which serves breakfast and lunch. Tenants include Icon Hospitality Group and Old Republic Title.
New York Life bought the building from Hines in 2018 for $100 million, or $323 per square foot.
DiMurro said Columbus had considered entering the Phoenix market since before the pandemic because of the city’s favorable business and tax environment.
“What we saw was an opportunity to purchase what’s considered one of the premier office buildings in that Camelback Corridor submarket,” DiMurro told the Business Journal. “We see [24th at Camelback] as a stabilized asset, but there are always things we can do.
“Right now, we’re planning on completing the improvements started by New York Life, which include some of the common areas and building some spec suites.”
Brokers Barry Gabel, Chris Marchildon and CJ Osbrink of Newmark Group represented the buyer in the sale.
From January through March, there were $228 million in office building sales through18 deals across greater Phoenix, according to Newmark. The top deal was the sale of Koll Cotton Center for $38 million.
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Newmark expects to see an uptick in sales in the next few months with 10 commercial real estate deals that could top $15 million.
Leading office sales could follow current leasing trends, with submarkets such as Scottsdale, Camelback Corridor and Tempe commanding top dollar rents compared to market averages.
The Camelback Corridor had an asking rate of $37.78 per square foot, which only trailed Tempe’s asking rate of $38.46, according to a first-quarter report from Avison Young.
— Dana Bartholomew