Phoenix Multifamily, Retail Markets Rebound While Office Market Lags


Article originally posted on Phoenix Business Journal on January 19, 2012

Scottsdale-based Orion Investment Real Estate Solutions put together some interesting end-of-year reports pertaining to the multifamily, retail and office markets.

While the multifamily and retail market have shown strong growth over the past two years, the office market can’t say the same.

Multifamily

In the multifamily market in the Phoenix metro area, there were 181 transactions equating to almost $1.4 billion in 2011. That was a 132 percent increase from the $590 million in deals that were conducted in 2009. In 2011, there were 27,306 units sold at an average price of about $50,000. That’s up from 2010 when the average price per unit sold was $44,738.

The most expensive property trading hands was Trillium Pinnacle Peak, 24250 N. 23rd Ave. in Phoenix, which sold for $76 million or $104,972 per unit. The buyer’s down payment was $19 million.

On a per-unit basis, the most expensive property was Glen Eagles, 8247 E. Bell Road in Scottsdale, which sold for $55.4 million or $167,945 per unit. The deal was all cash.

Retail

In the local retail market, there were 66 transactions equating to $198 million. That was a 74 percent increase from the $114.1 million in deals that were conducted in 2009. In 2011 there was 2.3 million square feet sold at an average price of $84.91 per square foot. That’s up from last year, when the average price per square foot sold was $71.47.

The most expensive property trading hands was Tatum Point Shopping Center, 4727 E. Bell Road in Phoenix, which sold for $30 million or $172.88 per square foot. The buyers paid all cash.

On a square foot basis, the most expensive property was Dana Park Village Square, 3440 E. Baseline Road in Mesa, which sold for $319.07 per square foot. The buyers paid all cash.

Office

In the local office market, there were 53 transactions equating to $325.2 million. That was a five percent decrease from the $342.8 million in deals that were conducted in 2009. In 2011 there was 3.4 million square feet sold at an average price of $95.24 per square foot, or a decrease of seven percent from the $102.01 per square foot paid in 2010.

The most expensive property trading hands was Fountainhead Office Plaza, 1625 W. Fountainhead Parkway in Tempe, which sold for $137 million or $312.02 per square foot. The buyers paid all cash. That also was the most expensive property on a square foot basis. It is 100 percent leased to the University of Phoenix.

The second most expensive property on a per square foot basis was the PetsmartCorporate Headquarters, 19601 N. 27th Ave. in Phoenix, which sold for $280.31 per square foot. The buyers in that also paid all cash. It is 100 percent leased to Petsmart.