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As part of an expansion program that took it to Dallas and Denver in recent years, TerraCap Management LLC has completed its first purchase in Phoenix for $103.5 million.
The Naples-based real estate investment firm’s inaugural deal in the Arizona market involved Anchor Centre, a two-building office complex with roughly 333,000 square feet of rentable space.
At the time of the late January purchase, Anchor Centre was 93% leased to tenants including Humana Insurance, Northwestern Mutual Life Insurance and construction engineers Black & Veatch.
“We saw it as a very good opportunity in a new market for us,” says Steve Good, a TerraCap partner and the firm’s national director of acquisitions.
“Phoenix is a market we’re very bullish on,” Good adds. “We’ll continue to look for opportunities there for years to come. We see a lot of upside with Anchor Centre. It’ll be a good long-term hold for us.”
Anchor Centre, which was constructed in 1983 and 1986, had been owned for the past decade by KBS Real Estate Investment Trist Inc., a Newport Beach, Calif. firm that has been involved in more than $42 billion worth of transactions in its 30-year history.
Good lauded KBS’ renovation of the four- and six-story complex on East Camelback Road, which contains amenities such as an on-site deli, a five-star restaurant, a fitness center with classes and personal trainers, shuttle service to nearby shops and restaurants, dry cleaning service and a tenant lounge and game room.
He says the renovations are reflected in the “institutional quality of the tenant roster.”
TerraCap financed the acquisition with debt financing from Colony Capital arranged by commercial real estate brokerage firm JLL.
The Southwest Florida company, which was formed in 2008 and today has a portfolio of more than seven million square feet of space valued at roughly $1.5 billion, has retained CBRE Group to manage the property and commercial real estate brokerage firm Cushman & Wakefield to lease Anchor Centre’s available space.
Steve Hagenbuckle, TerraCap’s founder and managing partner, describes the property as a “well-appointed, iconic office campus in such an ideal location.”
He adds Anchor Centre should continue to do well because of its close proximity to high-end retail and restaurants and a major highway, and as a result of corporate relocations from West Coast markets to lower-cost centers such as Phoenix.
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