Strong recovery in the Superstition Corridor contributed to this week’s $4.9 million sale of Inverness Commons II, a value-add office asset represented by the Phoenix office of JLL. The 60,960-square-foot building sits within one mile of the U.S. 60 Superstition Freeway and in the heart of the Superstition Corridor, a submarket that over the past 12 months has experienced a significant improvement in vacancy rates as new office and medical users flock to the area.
JLL Senior Managing Director Dennis Desmond represented the property seller, Omninet, in the transaction. The property buyer was G2 Capital. JLL Managing Directors Dave Seeger, Karsten Peterson and Mark Gustin serve as the property’s leasing team and partnered with Desmond on the sale.
“The Superstition Corridor is an exceptional market for value-add investors,” said Desmond. “G2 Capital recognized this early on, and has plans to capture that potential with strategic capital improvements. For a project that sits in the shadow of neighbors like Banner MD Anderson and A.T. Still University, the upside opportunity is significant.”
According to JLL, the Superstition Corridor office submarket already this year has achieved 167,833 square feet of total net absorption, with an additional 170,000+ square feet of tenants expected to move in by year’s end. This has helped drive direct vacancy down from 27.9 percent in Q1 2015 to 22.4 percent in Q1 2016. It has also helped pushed average rents back above $23 per-square-foot, a rate nearing the $26.15 per-square-foot high water mark achieved in 2007.
“With a 44.4 percent occupancy rate, Inverness is in a prime position to fill its vacant space and maximize the benefits of an improving market,” said Desmond. “The 12 neighboring office buildings are currently 82 percent occupied. Surrounding medical office space is operating at more than 87 percent occupied.”
Inverness Commons II is located at 5416 E. Baseline Rd. in Mesa, Arizona, between Baseline Road and the U.S. 60, just east of Higley Road. The 2001-built, two-story office building sits on 5 acres, within walking distance to retail and restaurant amenities, and in a medical hub of the Southeast Valley that includes Banner Gateway Hospital, Banner MD Anderson Cancer Center, Phoenix Children’s Hospital and the Arizona Health & Technology Park (home to A.T. Still University of Health Sciences).