Phoenix’s office investment market is showing renewed momentum, with a prominent Camelback Corridor property changing hands in the city’s largest single-building office sale of the year.
Esplanade III, a 10-story, 222,000-square-foot Class A office building, sold for $86 million to Southwest Value Partners. The seller was an LLC affiliated with Transwestern and C-III Capital Partners, which acquired the property in 2019 for $60.2 million. JLL represented the seller in the transaction.
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The sale represents a roughly 43% increase from the building’s 2019 purchase price and underscores continued investor interest in high-quality office properties despite broader challenges facing the sector.
Esplanade III is part of the 1.3 million-square-foot Esplanade mixed-use campus in Phoenix’s prestigious Camelback Corridor. The larger development also includes Esplanades I, II, IV and V, which are co-owned by Monarch Alternative Capital and Tourmaline Capital Partners. The campus has undergone significant renovations in recent years.
Esplanade III is reportedly 83.4% leased, with tenants including Vanguard Realty Advisors, Barclay Group, Velocity Retail Group, Husch Blackwell and Pederson Group.
“What we’re seeing across Phoenix and the broader Sun Belt is sustained demand for Tier 1 and Tier 2 office product in best-in-class locations like the Camelback Corridor,” Will Mast, managing director for JLL Capital Markets, said. “There is meaningful capital flowing to these assets, and this transaction reinforces that conviction.”
Phoenix office market gains momentum
The deal comes as leasing activity across Metro Phoenix shows signs of improvement. Office leasing reached approximately 1.1 million square feet during the second quarter, according to CBRE, up from 924,000 square feet during the first quarter.
The Camelback/Piestewa Peak submarket accounted for approximately 92,000 square feet of leasing activity. Class A properties have been a significant driver of the market’s recent momentum, according to Cushman & Wakefield.
While Esplanade III represents 2026’s largest single-building office transaction, a larger multibuilding deal occurred in May when LXP Industrial Trust acquired the 628,000-square-foot former University of Phoenix campus for $103 million.
The latest transaction also follows two major Camelback Corridor sales in 2024. The 24th at Camelback II tower sold for $97.9 million, setting the record for the region’s largest office sale that year, while neighboring 24th at Camelback I traded for $86.1 million.
The Esplanade acquisition further expands Southwest Value Partners’ already significant Arizona office portfolio. The Nashville- and San Diego-based investment firm acquired seven Phoenix office buildings totaling more than 1.5 million square feet from City Office REIT Inc. in a $296 million transaction in 2025. The company also owns a four-building office complex in Tempe.
The $86 million Esplanade III sale adds another high-profile asset to that portfolio while providing another indication that investors remain willing to deploy significant capital for well-located, high-quality Phoenix office properties.
