Net Lease Sells Medical Campus in Scottsdale for $72M

The head of a local trust has picked up a 380,100-square-foot medical office complex leased to CVS Health in Scottsdale for $71.5 million.

Robert Samuel, a trustee of the Phoenix-based Robert C. Samuel Revocable Trust, bought the 38-acre campus leased to CVS Caremark at 9501 East Shea Boulevard, the Phoenix Business Journal reported. Samuel leads Samuel & Company, a property management firm.

The seller was Net Lease Office Properties, based in New York. The deal works out to $188 per square foot.

It’s not clear when Net Lease bought the two-story offices, and for how much. The campus has five square buildings around a central courtyard, according to a Google satellite image.

Net Lease Office Properties said the net proceeds from the deal were used to repay an approximately $55 million loan on a senior secured mortgage from JPMorgan Chase and another $8 million on a mezzanine loan, according to a news release.

Brokers Peter Bauman and Tivon Moffit of Institutional Property Advisors, a unit of Marcus & Millichap, held the listing.

“Home to CVS’s main data center, the site is an irreplaceable parcel that is completely built out and any future development is restricted to adaptive redevelopment only,” Moffit said in a statement last spring.

CVS Health, based in Rhode Island, recently extended its lease for 15 years. Terms of the deal were not disclosed. The medical campus serves as a corporate office and data center.

The area around the CVS campus is home to medical users and professional services such as Day Law Firm, Desert Plastic Surgery, Audiology of Scottsdale and others, according to the Business Journal.

In March, local office brokers told the newspaper to expect a more robust second quarter for sales of office buildings.

Sales for prime properties picked up during the second quarter, including the sale via Newmark of 24th at Camelback, The Beam on Farmer and 3200 Central.

Real estate industry experts said the medical office market has performed well and was expected to remain hot for both leasing and sales.

“You get a higher probability of renewal, higher occupancy levels, generally higher rents as well because they have heavier infrastructure,” Newmark’s CJ Osbrink previously told the Business Journal.

“Even though we are a younger metro out here, we are also a heavy retirement metro with a lot of different amazing world-class hospital systems which again kind of feed into that medical office,” he added.

— Dana Bartholomew