Suburban Phoenix center sells for $645.1 million as mixed-use sites draw investors

Article originally posted on CoStar on July 3, 2025

Mixed-use properties featuring not only retail but residential and office space have found favor with investors this year, with one in Arizona just fetching $645.1 million.

Scottsdale Quarter, a roughly 755,000-square-foot development, last week was acquired by FalconEye Ventures, a real estate firm founded by billionaire tech entrepreneur George Kurtz. FalconEye plans to make a $100 million capital investment in the suburban Phoenix complex, which will be operated by local retail landlord Vestar.

That big-ticket, mixed-use real estate deal, however, ranks second to a property sale that closed in April. That’s when Kite Realty Group partnered with global investor GIC to acquire lifestyle center Legacy West at 5908 Headquarters Drive in Plano, Texas, for an eye-watering $785 million.

Both Scottsdale Quarter and Legacy West have retail and office space, as well as housing. Such mixed-use properties have so much appeal to buyers that this year they are getting bigger prices than pure-retail properties such as traditional malls and shopping centers. For example, in Arizona so far this year one of the biggest retail property sales was for Superstition Gateway, a 507,000-square-foot retail center in Mesa, traded for $121 million in April, according to CoStar data.

Nationally, in one of the year’s bigger retail deals just last week, Swire Properties sold its 75% interest in Brickell City Centre, a 500,000-square-foot, open-air retail center in Miami to mall giant Simon Property Group for $512.63 million. Simon already owned a 25% interest in the property and now holds 100%.

Retail landlords across the country are adding new uses — multifamily, offices, hospitality — to their malls and shopping centers to create lively work-live-play environments and drive foot traffic. Additions like housing can drive up a retail property’s value, according to Rudy Milian, president and CEO of retail consultant Woodcliff Realty Advisors.

“Mall valuations have generally declined for all types of malls over the past 10 years when lenders provided mortgage loans and packaged them through CMBS, some of which cannot be refinanced at those levels today, given the lower valuations and higher lending costs,” Milian said in an email to CoStar News. “But the darling of commercial real estate is multifamily. When malls add multifamily, the combined retail-residential valuations in those properties increase tremendously because there is considerable demand for rental residential properties in the U.S., driven by organic population growth and immigration.”

But there has been an uptick in sales of traditional U.S. retail properties, according to CoStar.

“Retail investment sales gained momentum in 2024, with annual volume reaching $59 billion — an 8% increase from the prior year,” CoStar said in its most recent report on the sector. “Each quarter built on the last, culminating in a fourth quarter that posted the year’s strongest showing. The $18.4 billion in fourth-quarter transactions outpaced year-end tallies seen between 2016 and 2020.”

That momentum continued into this year, according to CoStar.

“First-quarter volume climbed 11% above the same period last year, and April’s preliminary figures came in 45% higher than April 2024,” CoStar said. “While it’s too early to call the second quarter, the market is clearly on stronger footing.”

FalconEye and Vestar on Tuesday declined to comment on Scottsdale Quarter’s price, which was disclosed in public documents.