Published:   September 20, 2013
Volume:   XIX    Number:   37


Phoenix/Tempe - Companies formed by Cole Real Estate Investments in Phoenix (NYSE:COLE, Chris Cole, chairman) paid $56.33 million ($184.91 per foot average) to purchase 304,637 sq. ft. of office and back-office space in three properties located in Phoenix and Tempe. The seller in three separate cash sales were companies formed by LBA Realty in Irvine, Calif. (Steven Layton, principal). The Valley assets are part of a larger portfolio sale between Cole and LBA Realty involving 900,000+ sq. ft. of office and industrial buildings located in Arizona, California and Colorado. The $100+ million portfolio deal is comprised of single-tenant office and industrial projects. Over a 10-year period from 1998 to 2007, BREW reported a LBA Realty fund and funds managed by a company LBA now owns paying a combined $33.314 million to acquire the three Valley properties. Cole Real Estate Investments is a publicly-traded real estate investment trust (REIT) that has almost $8 billion in assets. The 1,000+ properties are comprised of 44 million sq. ft. of single-tenant and multi-tenant retail buildings, and single-tenant office and industrial projects located in 48 states. The company is looking to buy additional investment properties in the Phoenix area, as well as other markets across the U.S. Here is the name, description, location and price Cole paid for the Valley projects from LBA Realty: DeVry Building, 122,646-square-foot office at 2149 W. Dunlap Avenue in Phoenix, $23.03 million ($187.78 per foot); Cotton Center II, 99,734-square-foot back-office at 4121 E. Cotton Center Boulevard in Phoenix, $18.88 million ($189.30 per foot); Rio Salado Corporate Center, 82,257-square-foot back-office at 1415 W. 3rd Street in Tempe, $14.42 million ($175.30 per foot). The sale of the DeVry Building in Phoenix was negotiated through Jeff Cole and Ed Hernandez of Cushman & Wakefield in Irvine. They were assisted in the transaction by Chris Toci, Chad Littell, Larry Downey, Jerry Jacobs and Mike Sayre of C&W in Phoenix. In September 2007, BREW reported a fund formed by LBA Realty paying $16 million ($130.46 per foot) to buy the Dunlap Avenue office, which is leased to DeVry University. The structure was built in 1991. In August 2002, BREW reported a fund managed by Bedford Property Investors Inc. of Lafayette, Calif. paying $24.3 million to acquire the Cotton Center II building and Cotton Center I, a 114,484-square-foot flex structure located at 4025 E. Cotton Center Boulevard. Based on the average price per foot of $113.44 per foot for the two buildings, the amount allocated to acquire Cotton Center II was $11.314 million. Both of the Cotton Center structures were developed in 2000. LBA Realty still owns Cotton Center I, which is a multi-tenant building that has some vacancy. In July 1998, BREW reported another Bedford Property Investors fund paying $5 million ($60.79 per foot) to acquire the Tempe building. That property, which was built in 1981, was converted from warehouse to back-office use after it was purchased by the Bedford Property fund. In May 2006, BREW reported LBA Realty taking over ownership of roughly 1.8 million sq. ft. of office and industrial space in the Valley as part of the $432 million acquisition of Bedford Property Investors (NYSE:BED). LBA Realty paid $27 per share to purchase the outstanding shares of Bedford Property Investors, a former real estate investment trust (REIT) that had been publicly-traded on the New York Stock Exchange. Bedford's assets included about 6.5 million sq. ft. of office and industrial buildings in 72 properties located in California, Arizona, Colorado, Oregon and Washington State. The privately-held LBA Realty entered the Valley real estate investment market in January 2002 with the $76.3 million acquisition of a 586,403-square-foot office building within Phoenix Plaza at the northeast corner of Central Avenue and Thomas Road in Phoenix. LBA Realty is looking for additional office and industrial investment opportunities in the Valley. LBA Realty owns 26+ million sq. ft. of industrial space and $16+ million sq. ft. of office properties in the Western U.S. markets of Arizona, California, Oregon, Washington, Nevada, Utah, Colorado and Texas. Bob Hubbard is the contact at LBA Realty . . . call him at (602) 648-0905. Robert Micera is chief investment officer for Cole Real Estate . . . reach him at (602) 778-6244. Talk to Cole and Hernandez of C&W in Irvine at (949) 474-4004. The C&W agents in Phoenix are at (602) 253-7900.

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