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KBS REIT Pays $85.1M for Phoenix Office Portfolio

Angelo Gordon Co, DW Capital Ptnrs Sell 333,000 SF in Camelback Corridor
May 29, 2014
KBS Real Estate Investment Trust III closed on its acquisition of Anchor Centre, a two-building office complex at 2201-2231 E. Camelback Rd. in Phoenix, AZ. A joint venture of Angelo, Gordon & Co. and DW Capital Partners LLC sold the assets for $85.1 million, or about $252 per square foot, plus closing costs.

The 333,284-square-foot complex consists of a six-story and a four-story office building constructed in the 1980s on 7.3 acres at the southwest corner of 24th Street in the Camelback Corridor submarket of Maricopa County.

The property is in very close proximity to housing, shops, restaurants, hotels, and golf courses, and offers an extensive amenity package including on-site fitness and conferencing centers, visitor and tenant parking, courtyard seating with Wi-Fi connectivity, and The Gladley, a white-tablecloth restaurant.

AG/DWC Anchor Centre LLC acquired the assets in November 2010 for $52 million ($154 PSF), according to CoStar data. See CoStar COMPS #2002956.

In 2012 the Anchor Centre East and West buildings underwent an extensive, $10 million renovation.

Currently 79 percent leased to 27 tenants, the asset carries gross asking rents of $29 per square foot with aggregate annual effective base rent of approximately $4.9 million, according to the buyer. The current weighted-average remaining lease term is roughly six years. Humana anchors the property at 71,221 square feet.

"Because of its amenity package, walkable amenities, nearby hotels, and its 24th Street and Camelback location in the Camelback Corridor, we believe Anchor Centre is an exceptional asset that combines everything KBS REIT III pursues in a new acquisition," said KBS Capital Advisors West Region President Rodney Richerson.

The buyer funded the acquisition in-part with a new mortgage loan provided by US Bank totaling $53.2 million and proceeds from its offering.

KBS REIT III, a public, non-traded REIT based in Newport Beach, CA, is controlled by external advisor KBS Realty Advisors, which has completed approximately $30 billion in transactions since 1992 via 14 separate accounts, 11 funds, and 5 REITs - including KBS REIT II which owns the nearby, 445,957-square-foot Fountainhead Office Plaza in Tempe, AZ.

Christopher Toci and Chad Littell with Cushman & Wakefield, Inc. represented AG/DWC in the sale. KBS handled the deal in-house.

Please see CoStar COMPS #3031365 for additional information on this transaction.
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