PHOENIX, ARIZ. (Sept. 14, 2023) – The office market in Metro Phoenix is experiencing a surge in demand for owner/user deals. In the past six months, approximately 55 percent of all office sales have been sold to an owner/user. The 2-year historical average has hovered around 36 percent, according to CoStar.
These owner/user sale statistics are a macro-representation of the business friendliness within Metro Phoenix. The market continues to see a trend of businesses moving here or expanding to reap the benefits of the Valley’s labor pool, favorable tax structure, and economic benefits, and they often acquire commercial real estate to support their expanding footprint.
A deal in Gilbert, Arizona, closed by NAI Horizon, offers further proof of this continuing narrative.
Senior Vice President Don Morrow and Vice President Dylan Whitwer were entrusted with representing The Commerce Insurance Company, in the $10.58 million owner/user sale of 1555 N. Fiesta Blvd., in Gilbert.
Within six months, the NAI Horizon team was able to open escrow with a qualified buyer, closing the sale shortly thereafter.
The buyer, Graduation Solutions, will occupy the entire second floor of the building, which will serve as its corporate headquarters. Graduation Solutions is a Dropout Recovery Program that has assisted more than 3,000 students in online programs.
As is often the case in the Phoenix market, Graduation Solutions was facing a rapid-growth trajectory and will be expanding from its former 10,100 SF building in East Mesa, to the 29,000 SF second floor. Woodside Homes, the 28th largest homebuilder in the U.S, occupies the first floor of the building. The buyer was represented by Julie Hance with Rick Brandt Real Estate.
“What we’re hearing from our clients is that Phoenix is different,” Morrow said. “The Valley is a prime location for business expansion and attraction with many companies wanting to be here for the talented and deep labor pool, and to serve our rapidly growing population.”
When the building was first listed, it attracted an immediate interest from value-add investors, who would profit by dividing and leasing out the second floor. However, to capture the highest value for the asset, Morrow and Whitwer strategically rebranded the asset as an owner/user opportunity.
Interest quickly picked up and attracted the attention of multiple buyers, which ultimately led to selecting Graduation Solutions.
“Utilizing our personal databases, Real Capital Markets, and other marketing tools, we were able to make over 14,000 individual touch points to qualified owner/users, fellow commercial brokers, and value-add Investors alike, ultimately leading to a successful sale,” Whitwer said.
This sale, along with other recent owner/user sales in the Phoenix market, supports the continued theme that Metro Phoenix and its commercial real estate market present all of the tools necessary for a business to grow and thrive.
About NAI Horizon
Exceptional global commercial real estate solutions begin with local market leadership and expertise. Established in 1992, NAI Horizon is a full-service commercial real estate company serving Arizona with offices in Phoenix and Tucson. NAI Horizon is passionate about commercial real estate, providing Brokerage and Property Management Services for local, national, and international clients. NAI Horizon is a member of the NAI Global commercial real estate network providing real estate solutions to more than 300 offices worldwide. For more information, visit www.naihorizon.com.
About NAI Global
Advisory Services, Leasing, Property Management, Property & Note Sales, and Tenant Representation
NAI Global is a leading global commercial real estate brokerage firm. NAI Global offices are leaders in their local markets and work in unison to provide clients with exceptional solutions to their commercial real estate needs. NAI Global has more than 300 offices in 43 countries strategically located throughout North America, Latin America and the Caribbean, Europe, Africa, and Asia Pacific, with 5,100 local market professionals managing over 1.1 billion square feet of property and facilities. Annually, NAI Global completes more than $20 billion in commercial real estate transactions and gross revenue of $1.5 billion.
NAI Global professionals achieve extraordinary results for clients locally and globally through creativity, collaboration, and the consistent delivery of exceptional knowledge and service that only market-leading firms can provide. NAI Global provides a full range of corporate real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain, logistics consulting, and related advisory services.
To learn more, visit www.naiglobal.com.
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