Continuing to expand its downtown Phoenix presence, San Diego-based Parallel Capital Partners, in joint-venture with Angelo, Gordon and Co., announced today it has acquired Arizona Center – a Class A, 16-acre mixed-use campus in downtown Phoenix – for $126 million.
Spanning over one million square feet, the Van Buren Street property – acquired from Equity Commonwealth (NYSE: EQC) – is comprised of two 20-story office towers, low-rise office and open-air retail space, a 3.5-acre urban garden, a 24-screen AMC movie theatre and 3.341 acres of vacant land all set on a 16-acre superblock site. Eastdil Secured represented the seller and Parallel represented itself in the deal.
According to Matt Root, CEO of Parallel Capital Partners, Parallel will invest more than $25 million to reinvent and upgrade the landmark property. “The transaction allows for the development of an additional 3.9 million square feet of improvements and upgrades,” he said. “We are undertaking a comprehensive renovation of the campus, to include revamping and expanding the retail complex, adding parking facilities, modernizing elevators and upgrading the landscaping and the courtyard area.” Arizona Center was first developed in 1989 by the Rouse Co. and sits on the former site of St. Mary’s High School at Van Buren and Third Streets. Parallel is assembling a world-class repositioning team for the renovation with construction expected to begin in the spring of 2016.
Root said this latest acquisition reflects his firm’s core mission of acquiring best of class assets in top western markets. “Phoenix is in recovery mode, and we believe downtown will capture the economic benefits of the new cycle’s first revolutions. Arizona Center is the quintessential trophy property, and we are thrilled to add it to our portfolio,” he said. “The right urban mix bolsters occupancy. That density raises values, and that vibrancy attracts investment capital.
We believe our renovations to the complex will be instrumental to the ongoing renaissance of downtown Phoenix, which is quickly becoming a hub for cultural, higher educational and arts institutions.”
Furthering its appeal, Arizona Center is located within walking distance of an abundance of downtown amenities and attractions, including Chase Field and US Airways Center, the newly remodeled Convention Center and the collegiate campuses of ASU and University of Arizona. Currently 89 percent leased, the building has an established, long-term tenant base with anchor tenants including Arizona Public Service Co., the Snell & Wilmer LLP law firm, Fox Sports Arizona, Arizona State University and SmithGroup architects.
Parallel has maintained an active presence in the region and currently has over two million square feet of Phoenix office and retail space including One North Central and City Square in Phoenix’s central business district. In June of 2015, Parallel acquired One North Central, a 20-story Class A tower around the corner from its latest acquisition.