At first glance, the sale of two small, 1970s buildings might appear unremarkable, but the deal is a good example of the shrewd and somewhat contrarian ethos of the seller, local commercial real estate firm Larsen Baker. The deal was awarded a 2023 CoStar Impact Award by an independent panel of industry professionals within the market.
Or, as Impact Award judge Sam Sufi put it, the seller's "grave dancing strategy," which he compared to the canny maneuverings of Chicago billionaire and real estate magnate, Sam Zell.
The properties in question are a 6,048-square-foot bank branch at 6401 N. Campbell Ave. and 6405 N. Campbell, a two-story office building of about 7,000 square feet in size. The two are on a prime corner of a major commercial corridor in Tucson's Catalina Hills area, East Skyline Drive, and sit south of one of the Tucson area's most upscale retail centers, La Encantada shopping mall.
Larsen Baker acquired both from Bank of America in December 2020 for $3.5 million, according to CoStar records. The buildings were vacant when Larsen Baker bought them. Records on file with the Federal Deposit Insurance Corporation show that Bank of America shuttered its operations there permanently in spring 2020.
At the time, unused bank properties were a dime a dozen. The property was one of hundreds of branch locations that had gone dark as financial institutions shed real-life space made redundant by online banking, a consolidation process that continues to this day. Between 2010 and 2021, the number of bank branch offices dropped from just over 85,000 to about 72,400, a 15% decline over that period.
The trend was even more pronounced in Arizona, which saw a dramatic drop off in both the number of branch locations and banking companies. Over that time, the number of FDIC-insured banks operating within the state fell a whopping 76.4%, from 39 to just 13. Meanwhile, the number of bank branches fell 23.5%, from 1,336 in 2010 to 1,022 in 2021.
Nevertheless, Larsen Baker wagered that it could renovate, release and flip the buildings, a feat it accomplished in less than two years. The company overhauled both, then leased the 6401 N. Campbell to Charles Schwab, a national financial services and wealth management company based in Westlake, Texas. In June 2022, the building was purchased for $5.8 million as a net-leased investment by Tucson firm Iridius Capital.
The building at 6405 N. Campbell is now occupied by Singularity Capital, a venture investment group that bought it in June as well, paying $4.4 million for the property, according to Pima County records.
The total sum is $10.2 million, almost three times the 2020 purchase price. The sale paid dividends to the larger Tucson community as well, by reviving dormant buildings on a heavily trafficked commercial corridor.
About the project: The buildings at 6401 and 6405 N. Campbell were both originally constructed in 1978. Larsen Baker renovated them in 2021.
What the judges said: "We need to look at more of the dated, vacant, decaying buildings ready to be revitalized to bring new energy to town and enhancing the [aesthetics] of Tucson," said Sufi, real estate development manager with Tucson's Diamond Ventures.
They made it happen: Isaac Figueroa and Elaina Elliot ran point on the sale for Larsen Baker.
