Several out-of-state investors acquired office buildings in Phoenix throughout 2022 when some huge deals were consummated.
North Scottsdale and Camelback Corridor were the target submarkets for some of the largest deals of the year. Those two were, respectively, the strongest submarkets in terms of net absorption over a 12-month span, according to CoStar Group Inc.
"Landlords are realizing that this area is one where the office employers have continued to want to be," CBRE Group Inc.'s Bryan Taute previously said of Camelback Corridor. "As employers become more challenged with bringing people to the office, they're also looking at being at best-of-the-best locations. ... It is an area of the city where young and older employees are attracted to this area because of the quality of the life, the restaurants and all of the things that this area provides."
Taute is listing broker for the Esplanade, which was the biggest office sale of the year at more than $350 million.
Renovations planned for some of the newly acquired buildings
Despite the large price tag, the new owners of the Esplanade are investing another $45 million to improve the quality of the office campus. Pumping more money for new renovations was a theme throughout 2022 as flight-to-quality at the top of minds for tenants and landlords.
Brokers and companies say employee wants have to be top of mind to recruit, retain and get the best out of their workforce in this post-Covid world. And despite rising rents, the costs of labor turnover often outweigh the price of companies' real estate, allowing firms some leeway to lease quality spaces in prime Valley submarkets.
Including the Esplanade, several new landlords for top office deals will have additional investment beyond just getting the keys to the property.
Here are the top 10 Valley office building sales of 2022 based on Business Journal reporting and real estate database Vizzda. View the accompanying slideshow to see photos and more information of the office buildings that traded hands.
10. Warner Crossing Business Park - $49.5 million
Washington D.C.-based The Carlyle Group bought the Warner Crossing Business Park in March. The Tempe business park was previously owned by New York-based real estate firm iStar. The four single-story buildings that make up the park were built in 1996 and are located at 1120, 1130, & 1140 W. Warner Road and 8440 S. Hardy Drive on 21.87 acres, according to Vizzda.
9. The Reserve at San Tan - $53.1 million
Building 6 at The Reserve at San Tan, which is part of a larger office project, was acquired by Los Altos, California-based West Valley Properties for more than $53.1 million.
West Valley Properties put down more than $23 million from a new loan to finance the purchase from Phoenix-based Orsett Properties. The deal closed in July. Building 6 at The Reserve at San Tan, located at 355-365 E. Germann Road in Gilbert and includes a Press Coffee Roasters.
8. Scottsdale Forum - $53.6 million
Maryland-based real estate investment firm Federal Realty Investment Trust paid $53.6 million for the Scottsdale Forum. The 214,000-square-foot office building is located at 6263 N. Scottsdale Road. Federal Realty Investment Trust owns the Camelback Colonnade shopping mall and The Shops at Hilton Village center, located about a quarter-mile south of Scottsdale Forum.