Lee & Associates negotiated the sale of a mixed-use (retail and office) portfolio for $97.5 million as part of a 1031 exchange in Scottsdale, Ariz.
The 329,740-square-foot portfolio includes La Mirada retail and office center (148,773 square feet) and Scottsdale Seville, which encompasses a retail complex (90,893 square feet) and office building (90,074 square feet). Each of the properties was approximately 95 percent leased at the time of sale.
SPI AZ LLC purchased the portfolio from three limited liability companies controlled by the properties’ developer, Desert Troon Cos.
Located just east of the La Mirada Desert Park at 8900 E. Pinnacle Peak Road, La Mirada’s park-like design combines shopping, dining and office space grouped around a central courtyard. Bistro Provence, Mastro’s Steakhouse, Gallery 360º and M.B. York Day Spa are just some of the center’s 30 retailers and restaurants. The offices, comprising 50,000 square feet above the courtyard as well as in an additional professional building, include various real estate, insurance, law and investment firms.
Built in 1990, Scottsdale Seville is a specialty mixed-use center located at 7001 N. Scottsdale Road. The retail segment of the property consists of 20 high-end stores and restaurants, including Ruth’s Chris Steak House, Starbucks, Draper’s and Damon’s and In Celebration of Golf, which features 12,000 square feet of golf amenities. Office tenants include: Club Med Sales, DR Horton Homes and Washington Mutual.
“We are seeing a growing number of 1031 exchange buyers who have sold property in California and are willing to pay top-dollar for quality properties in Arizona,” said Patrick Dempsey of Lee & Associates’ Phoenix office. “The prime location of these properties in the budding Scottsdale market provides for long-term upside potential.”
According to Dempsey, about 85 percent of the transactions his team handles involve buyers who either currently own property in Arizona or have sold property in California and are looking to reinvest in Arizona. He says California property owners are attracted to the Phoenix area because they are able to purchase bigger properties with more credit and higher returns than properties they may have previously owned. In this transaction, a portion of the buyer’s equity came from a 1031 exchange following a property sale in California. The buyer also assumed the existing debt.
Lee & Associates provides commercial real estate services in California, Arizona, Nevada, Missouri, Illinois, Michigan, New Jersey, Texas and Wisconsin.