Canadian office REIT sells Phoenix portfolio, advancing plan to go private

Article originally posted on CoStar on September 10, 2025

A Canadian real estate investment trust sold six office properties across the Phoenix area for U.S. $266 million as part of a deal with two U.S. investment firms to take the REIT private.

City Office REIT, based in Vancouver, British Columbia, sold the buildings, which total nearly 1.25 million square feet, to the private real estate firm Southwest Value Partners, according to a statement from JLL, which represented the seller.

The properties include Block 23 in downtown Phoenix, Fifty90 in the city’s Camelback Corridor, the San Tan Corporate Center in Chandler, Papago Technology Center in Tempe, and The Square and The Quad in Scottsdale.

City Office is also slated to sell Pima Center, a two-building complex in Scottsdale at 9000 and 9200 East Pima Center Parkway, in a $30 million deal expected to close later, according to JLL.

The REIT announced plans in late July to sell its Phoenix portfolio as a condition of its plan to become a private company “in light of a challenging environment for the office sector,” the firm said in a filing.

City Office sold the properties to pay off debts and for general corporate purposes as part of its plan to merge with affiliates of New York-based hedge fund Elliott Investment Management and Morning Calm Management, based in Boca Raton, Florida.

The deal closed Aug. 15 and builds on a recovery in office investment sales in the region that started in 2024 and has picked up speed this year, according to CoStar analytics.

Greater Phoenix has logged nearly $2 billion in office sales volume over the past 12 months — above the decade-low total of $1.2 billion in 2023, though well below the five-year annual average of $2.8 billion in 2020, before the pandemic, according to the data.

City Office REIT expects to finish the sale of Pima Center “subject to the company obtaining certain approvals related to the property’s ground lease,” according to a JLL statement.

The deal to merge with MCME Carell Holdings, an affiliate of Elliott Investment Management and Morning Calm Management, is expected to close in the fourth quarter after the Pima Center sale is completed, according to City Office REIT filings.

City Office did not respond to requests for comment on the status of the merger.

After the Phoenix portfolio sale, City Office now owns 4.2 million square feet of properties in Dallas, Denver, Orlando and Tampa, Florida, Portland, Oregon, Raleigh, North Carolina, San Diego and Seattle.

JLL’s Ben Geelan, Will Mast and Charlie von Arentschildt represented the seller.