A California non-profit group paid $17.85 million for an office complex located near east Speedway and north Kolb Road, on Tucson’s east side. The buyer is the H.N. and Frances C. Berger Foundation, based in Palm Desert. Bob Young of CBRE helped broker the sale.
The 129,117-square-foot office complex includes three, two-story Class A office buildings sitting on a 9.43-acre parcel. Also included in the transaction are a total of 630 parking spaces.
The campus at 930, 940 and 950 N. Finance Center Drive is 100 percent occupied by a single tenant, GEICO Insurance, one of the nation’s leading providers of affordable automobile insurance. In 2003 the company leased 15,000 square feet of space in one of the buildings and since then it has expanded its leasable space twice, having now more than 1,000 employees in the office complex. Arizona Commercial Real Estate reports that GEICO has another five-and-a-half years remaining on its lease.
“We are seeing increased investor interest in single-tenant deals. The attractive yield provided on this deal compared very favorably to alternative fixed-income instruments and the buyer also received an investment-grade credit tenant,” said Kevin Shannon, vice chairman /managing director at CBRE.
According to CBRE Global Research and Consulting, Tucson’s Northwest office submarket saw positive absorption in the third quarter of 2012, while the Downtown and central submarkets recorded a low tenant activity. Additionally, the market saw more space vacated than absorbed for two consecutive quarters: Tucson office properties reported 45,865 square feet of negative absorption for the year.
Photo courtesy of CBRE, via Arizona Daily Star
Chart courtesy of CBRE Global Research and Consulting
For more news from Tucson, click here.