Lincoln Property Company (LPC) and Invesco Ltd. have purchased the historic Luhrs City Center in downtown Phoenix. The joint venture will next initiate a multi-million-dollar renovation that will evolve the landmark into a mixed-use blend of creative office space, ground floor restaurants and retail – part of a downtown resurgence that includes an active office market, thriving restaurants, sports venues and the early-2017 delivery of a directly adjacent, 19-story Marriott Residence Inn and Courtyard hotel tower.
Located at 11-45 W. Jefferson St. between Madison, Jefferson, First Street and First Avenue, Luhrs City Center includes two towers with 140,500 square feet of creative office space and a promenade with approximately 18,500 square feet of ground-floor retail space.
“When you think of iconic downtown Phoenix buildings, you think of Luhrs,” said Lincoln Property Company’s Executive Vice President David Krumwiede. “They call the project ‘historically modern’ because it has a combination of deep roots and modern staying power. This makes it very relevant in today’s creative office market and a great site to enhance with dining and shopping – amenities that will raise Luhrs to its highest and best use in the downtown market.”
Built by the Luhrs family between 1924 and 1929, just before the U.S. entered the Great Depression, Luhrs City Center in recent years has enjoyed approximately $10 million in capital improvements. This has modernized the development into a creative office environment with red brick interiors, exposed beams and similar features that have helped to attract a mix of office, tech and law tenants.
“Downtown development continues to thrive,” said City of Phoenix Community and Economic Development Director Christine Mackay. “The resurgence of the iconic Luhrs buildings has been instrumental in the renewed vibrancy of downtown commercial real estate activity.”
Luhrs City Center offers direct access to Phoenix Light Rail, CityScape, the Phoenix Convention Center, Arizona State University Downtown Campus, Chase Ballpark, the Maricopa County Court Complex and approximately 30 restaurants within a two-block radius. It is also immediately adjacent to the under-construction 19-story, 320-room dual branded Marriott Residence Inn and Courtyard hotel tower that will open in early 2017.
Office space at Luhrs City Center is currently 85 percent leased, with approximately 10,000 square feet of available office space remaining and approximately 15,000 square feet of available ground-floor retail space.
A multi-million-dollar renovation by LPC and Invesco will add improvements to the lobby, common areas, streetscapes and ground-floor retail, with a focus on leasing most of the ground floor space to “very unique and high-quality restaurant tenants who match the character and draw of Luhrs – users who are looking for this type of highly improved, move-in ready historic space that can position them for the level of success being achieved by surrounding bars and eateries,” said Krumwiede.
When it opened on April 1, 1924, the Luhrs Building was Phoenix’s first 10-story high rise. For more than 40 years, the top four floors of the building were home to the Arizona Club. The 14-story Luhrs Tower was delivered five years later, in 1929, and for decades remained the tallest building in the Southwest. The towers and retail space at Luhrs City Center are served by an adjacent 6-story parking structure with 434 spaces. All of the buildings are listed on the Phoenix Historic Property Register.
The property seller, Hansji Corporation, was represented by Newmark Grubb Knight Frank’s Executive Managing Director Jerry Jacobs and Managing Director Erik Marsh. Jacobs and Steve Callahan have been retained by LPC to handle the office leasing.
The purchase of Luhrs City Center caps off a record-breaking year for the Phoenix office of Lincoln Property Company, who since January has generated more than $233 million in metro Phoenix investment and development activity. This includes the $58 million LPC-Oaktree Capital Management purchase of Biltmore Commerce Center in Phoenix, the $42.3 million disposition of Camelback Square in Scottsdale and the $65 million LPC-Goldman Sachs purchase of Promenade Corporate Center in Scottsdale. It also includes the development and delivery of the $24 million Waypoint Building One office property in Mesa.
LPC is actively marketing pre-lease and/or design-build opportunities for Waypoint Building Two, and in March was selected to develop the first phase of Class A and mixed-use office space for The Grand, a 60-acre, urban mixed-use property within Papago Park Center.