In the largest commercial office property sale in Phoenix history, Jerry Colangelo and crew are participating in the purchase of the Marina Heights buildings on the shore of Tempe Town Lake.
The sale is reported to have been completed for $928 million. Yes, that’s nearly ONE BILLION FREAKING DOLLARS!
State Farm will continue to occupy the buildings in the sale / leaseback deal. Marina Heights consists of 2 million square feet of Class A office space. In addition to being the home to thousands of State Farm employees, you’ll find Mountainside Fitness, Matt’s Big Breakfast, Starbucks a Honor Health facility and more.
The buyers of the Marina Heights buildings assumed a 99-year ground lease on the 20.28 acre site and State Farm has reportedly signed a 25 year lease to stay in their current home.
When State Farm announced the fact that they were breaking ground at Marina Heights, their investment was said to be in the $600 million range. It sounds like the real estate market has been pretty good to the insurance giant.
Marina Heights has already been instrumental in changing the landscape in Tempe. This deal signifies the strength of their commitment to the community and shows the strength of the overall commercial real estate market. There’s some mighty big players playing in Downtown Tempe.
At roughly $457 per foot, this historic deal is massive in many ways. The dollar volume and the sheer size of the project represent mind boggling numbers for all but some of the biggest real estate investors on the planet. It was interesting to see that super-star commercial broker Jim Fijan mention the educated workforce, cost of living and quality of life in the region when talking about the valuation of this type of project. Vacancy rates for commercial space are VERY low in the Tempe market and investors appear to love the area.
Wow. Wow, Wow!! That’s one heck of a sale. It has been very interesting to watch how the real estate market in and around downtown Tempe has been evolving over the past several years.