Buchanan Street Partners, a national real estate investment management firm, has structured $34.5 million in bridge financing for the acquisition of two Class A office buildings in Tempe, Arizona. Along with its active equity investment platform, the firm is growing its lending activity for mezzanine debt and bridge loans in primary markets in the Western U.S. This transaction builds on the over 1 million square feet of commercial property the firm has acquired in the Phoenix area.
“Buchanan Street’s perspective as an owner itself is a decided advantage when providing structured debt for owners implementing value-add business plans,” said Chris Herthel, senior vice president of Buchanan Street Partners, who led the transaction.
The acquisition financing was provided to a joint venture between Cypress Office Properties and Harbert Management Corporation, with additional funds available for planned improvements and leasing costs. The buildings were 74 percent leased at closing.
The venture purchased Park Bridge and Park Garden, two Tempe office buildings totaling 287,000 square feet located at 1501 and 1620 W. Fountainhead Parkway in Fountainhead Corporate Park. The buildings benefit from a unique campus environment with ample amenities and parking, and a central location near downtown Tempe and Arizona State University. Fountainhead Corporate Park has good access to Interstate 10, US Route 60, and State Routes 143 and 202.
Tempe is one of the leading submarkets in Greater Phoenix, with a Class A office vacancy rate of 9 percent as of the third quarter of 2014. Submarket fundamentals and an experienced borrower were determining factors in Buchanan Street’s decision to fund the acquisition loan.
“This opportunity was a good match with our investment strategy to provide structured financing solutions where there is a good combination of an experienced borrower,
high-quality assets in transition, an attractive investment basis, and a market demonstrating positive trends,” added Herthel.