Nearly 2.1 million square feet of office space sold across Greater Phoenix in December, according to CommercialEdge. The value was 139.7 percent higher month-over-month and 50.4 percent higher year-over-year, as nearly 1.4 million square feet had changed hands in December 2020.
December’s transactions included all types of asset classes and 16 out of 23 transactions closed in suburban submarkets. Investors bet mainly on traditional and flex office spaces, with only three medical office properties in the mix.
The month’s largest sale in terms of square footage was also the priciest one and the only one to close in a primary urban location. City Office REIT Inc. paid $150 million for the office component of Block 23 at CityScape in downtown Phoenix. RED development sold the 295,400-square-foot, Class A property that was 95.5 percent leased upon closing. The deal also had the highest per-square-foot price recorded in 2021 for a Phoenix multi-tenant office property: $488.60.
2021 in investments
Greater Phoenix saw more than 13.6 million square feet of office space transacted in 2021. The volume was more than double the total square footage that traded throughout 2020, when only 5.6 million square feet changed hands.
Last year’s deals amounted to some $2.3 billion at an average price of $236 per square foot, 24.2 percent lower than the national $293 per square foot. The figures show a solid improvement when compared to 2020, when sales totaled $884 million at an average of $213 per square foot.
Of the 138 properties that changed hands, only 37, or 26.8 percent, were Class A assets. In terms of location, investors favored suburban buildings: Only 5 deals closed in Phoenix’s CBD and other 25 in urban submarkets.
The largest property that traded was the 499,000-square-foot Freeport – McMoRan Center in Phoenix’s CBD, purchased by Griffin Capital in a $1.3 billion unrecorded portfolio transaction. The deal, which closed in early March, encompassed some 4 million square feet of office, industrial, laboratory and retail space across 26 properties.
In other 2021 significant single-asset office transactions:
- Strategic Office Partners paid $132 million for a 300,000-square-foot property in Tempe;
- Shorenstein Properties acquired the 446,000-square-foot Fountainhead Plaza, also in Tempe, for $117.5 million;
- BPM Real Estate Group purchased PetSmart’s 365,672-square-foot headquarters in Phoenix in the metro’s largest deal of H1.
CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here. We included properties of 25,000+ square feet in our research.
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