Hines has sold a 306,900-square-foot office building in Phoenix for $97.9 million, the largest local office sale of the year.
The Houston-based developer traded 24th at Camelback II, an 11-story building at 2325 East Camelback Road, in the Biltmore area on the north side, the Phoenix Business Journal reported.
The buyer in the all-cash deal was Reno-based Solar Farms, a limited liability company led by Roger William Norman and based at the same address as off-road adventure company, Wide Open Excursions.
The deal works out to $319 per square foot. Brokers Will Mast, Ben Geelan, Jack Miler and Gigi Martin of JLL represented Hines in the sale. The buyer represented itself.
24th at Camelback II was the second office tower built by Hines in a planned 8.5-acre mixed-use development at 24th Street and Camelback Road. In 2018, Hines revamped the building’s lobby and common areas, while adding a conference room and speculative suites.
Its sale comes six months after New York-based Columbus Properties bought the adjacent 24th at Camelback I, which traded for $86.1 million, or $278 per square foot, according to the Business Journal. The purchase from New York Life Insurance came six years after the firm bought it from Hines for $100 million, or $323 per square foot.
At the time of sale, the 24th at Camelback II was 87 percent leased to such tenants as Blue Origin, Dorsey & Whitney, Mercer, Lucid, CoStar Group and Squire Patton Boggs.
Both buildings are near popular shopping centers, including the Shops at Town & Country and Biltmore Fashion Park, which just sold to locally based Red Development for about $110 million.
The curved glass building sits in the Camelback Corridor, with one of the lowest office vacancies in greater Phoenix in the third quarter, at 20.2 percent, according to CBRE. The highest vacancy submarket is east Phoenix at nearly 30 percent.
Mast, of JLL, said the office deal underscores the appeal and resilience of prime office buildings in “key markets.”
“It not only highlights investor confidence in the region’s economic fundamentals but also signals a positive shift in the office sector,” Mast said in a statement. “This sale demonstrates that well-located, quality office properties continue to attract significant investment, highlighting Phoenix’s growing stature as a prime destination for commercial real estate investment.”
John Bonnell, a managing director at locally based Stream Realty Partners, said such sales point to more nontraditional buyers investing in offices around Phoenix as companies order their workers back to the office full-time.
The origin of the buyer, Solar Farms, is somewhat murky.
Its office companion, Wide Open Excursions, is led by off-road racer Roger William Norman, the son of Don Roger Norman, a real estate developer and business partner of Lance Gilman, the owner of the Mustang Ranch, the famous brothel outside Reno.
The billionaire senior Norman, his son Roger and Gilman are also behind the 107,000-acre Tahoe-Regional Industrial Center, which claims to be the the largest business park in the world, now home to Tesla, Switch, Google, Walmart and more than 100 other large businesses, according to 2News Nevada.
— Dana Bartholomew
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