Centerpoint on Mill, a landmark for Mill Avenue and the heart of downtown Tempe since its inception 28 years ago, has been sold by Scottsdale, Ariz.-based DMB, Inc., to Mill Avenue Retail LLC of Scottsdale. The 127,027 square-foot commercial property commanded a sale price of $38.35 million.
Covering 22 acres starting at the northwest corner of Mill Avenue and University Drive in Tempe, Centerpoint on Mill was created through a unique public-private partnership with the City of Tempe. The property was DMB’s first large-scale mixed use development.
“One of DMB’s founding principles is based on the partnerships and the relationships built with municipalities, landowners, neighbors and tenants,” said Michael Burke, Vice President of Development for DMB. “The success of a development lies with the ability to craft and individualize a community or development based on the location and uniqueness of a parcel of land complemented by the visions of the municipality. DMB proudly partnered with the City of Tempe in the pursuit of creating and maintaining a vibrant and dynamic downtown area in and around Mill Avenue.”
Centerpoint on Mill represents one of the most significant redevelopment efforts in the history of the downtown area of Tempe and was a catalyst in bringing entertainment, national office and retail users to Mill Avenue. Throughout the project’s lifetime, DMB has been committed to maintaining a quality mix of retail, dining and office tenants that ensures and enhances the vibrancy of the Tempe community.
“Over the past 28 years, the City of Tempe and DMB have worked together to create a point of pride for the Valley, a truly urban destination that models the live, work, play ideal. DMB’s work as placemakers, developing a downtown core featuring high quality national and local retailers, unique dining, art, theater, and residential, has helped brand Tempe as a destination for tourists and locals,” said Tempe Mayor Mark Mitchell.
Glenn Smigiel, Bob Young, Steve Brabant and Rick Abraham with CBRE’s Phoenix office represented DMB in the transaction. Mill Avenue Retail LLC negotiated on their own behalf.
“The sale of Centerpoint on Mill is an indicator of the health of the Tempe market and the continued strengthening of the Phoenix-metro area in general,” said Smigiel. “This is an excellent investment opportunity in a thriving submarket.”
Tempe continues to be one of the most active markets in the metro area with the sale of Centerpoint on Mill coming just months after the announcement of other major downtown Tempe development projects. USA Place, the future home of the USA Basketball headquarters, will be located on the southeast corner of Mill and University near Centerpoint on Mill. Other major projects new to the downtown Tempe market include the soon-to-break-ground Marina Heights, future home of a large regional headquarters for State Farm Insurance, and Hayden Ferry III, the third and final phase of Parkway Properties’ Hayden Ferry Lakeside office development.
Downtown Tempe continues to exceed industry market conditions with a Class-A office vacancy rate of 5.1 percent. This is well below the metro Phoenix average of 18 percent. Job growth continues in Tempe as well. According to the City of Tempe, staff has participated in locating companies to Tempe in the past year resulting in 12,503 jobs and capital investment in the city exceeding $704 million.
The occupancy level, quality of tenants and prime location of Centerpoint on Mill allowed DMB to lease the property to stabilization. Overall, the property was 87% leased at time of sale while office space was 100% leased.
Current tenant roll includes Churchill’s Fine Cigars, Devil’s Diner, Fat Tuesday, Five Guys, Great Clips, The Handlebar Tempe, Jimmy John’s, Mellow Mushroom, P.F. Chang’s China Bistro, Pita Pit, Poppa Maize, Rita’s Italian Ice, Robbie Fox’s Public House and Sitewire. These tenants will soon be joined by AMC Theatres, Zipps Sports Grill, El Hefe, Hot N Juicy Crawfish, Lincoln Strategy Group and One Energy.
The sale also includes parking rights to approximately 720 parking spaces.