KBS has sold a 333,014 square-foot Class A office property, Anchor Centre, in Phoenix, Arizona to TerraCap for $103.5 million. The office property was owned by KBS REIT III.
“At KBS, we take pride in identifying opportunities to own and operate exceptionally well-located assets in key growth markets throughout the country that have strong value potential,” said Giovanni (Gio) Cordoves, Western regional president for KBS.
“Phoenix is a region that boasts some of the best population growth numbers anywhere in the country, impressive job growth and superior quality of life relative to other higher-cost markets. KBS was able to identify and leverage all that this market has to offer by acquiring Anchor Centre and elevating it to appeal to high-end office users,” he added.
Anchor Centre, the Class A office property, is located at 2201 and 2231 East Camelback Road in Phoenix, Arizona. Built in 1984 and 1986, the property is a two-building, four- and six-floor office complex that is 93.2% occupied.
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When KBS acquired Anchor Centre in 2014, the company began investing in the multimillion-dollar capital improvement program at the property. These upgrades included modernizing the lobby; renovating common areas, restrooms, and expanding and modernizing numerous amenity spaces—these efforts in many ways helped establish Anchor Centre’s reputation as one of the most desirable office buildings in the submarket, according to Cordoves.
Despite a sluggish first half of 2020, the Phoenix office market showed signs of growth during the third quarter, posting just over 300,000 square feet of positive absorption, according to JLL’s Q3 Phoenix market report. The fundamentals of a business-friendly environment, along with a diverse workforce, continues to stir interest in Phoenix as an attractive metro area to relocate and expand. This is evident in the recent increase in out-of-state companies looking at Phoenix as a long-term investment to take advantage of the lower costs of doing business and a rapidly growing talent pool.
“The region’s pro-business climate and robust talent pipeline aided in adding 103,700 jobs to the Phoenix market in 2019, according to JLL,” said Cordoves. “In addition, the market offers an affordable cost of living, a dry climate, and around 300 days per year of sunshine, drawing companies and top talent to the area. For these reasons and others, many office investors are showing interest in this area, which made Anchor Centre an increasingly sought-after property.”
Anchor Centre is situated in the epicenter of Phoenix’s Camelback Corridor, a submarket recognized as the premier corporate location in Phoenix, according to Tim Helgeson, asset manager for Anchor Centre and senior vice president for KBS.
On-site amenities at the Energy Star-certified asset include upscale dining, a deli, secured underground parking, a tenant lounge and game room, fitness center, conference facility, plaza area and outdoor patio.