NAIOP Arizona Owner/Developer of the Year Lincoln Property Company (LPC) has just completed the $90 million sale of Grand 1, marking the first Class A office building to be developed, fully leased and sold by LPC at The Grand at Papago Park Center in Tempe, Arizona.
With the sale of Grand 1, LPC has completed three of the top five commercial real estate sales in Arizona in 2019, totaling $270 million between Grand 1, the Waypoint office campus and Lincoln Logistics 40 in Goodyear, which was sold to Nike.
The Grand 1 acquisition also represents the Phoenix market entry for property buyer Susquehanna Holdings Ltd., a Florida-based holding company whose current portfolio includes office and industrial assets primarily concentrated in the Southeastern U.S.
The building is the first of 1.8 million square feet of Class A office space slated to be developed by LPC at The Grand at Papago Park Center, a mixed-use project totaling 60-acres and slated for 3.2 million square feet of office, multifamily, hotel, retail and restaurant space on the last developable parcel within the 350-acre Papago Park Center business park.
“Our mission is to create iconic real estate projects for market-leading companies and strategic investors,” said Lincoln Property Company Executive Vice President David Krumwiede. “We feel confident that we’ve done that at The Grand, and across the Valley, and we look forward to repeating that success with many buildings to come.”
Located along the Loop 202 freeway at 1101 W. Washington St., Grand 1 totals 219,212 square feet and four stories of Class A office space, along with an adjacent four-story parking garage. The building is fully occupied by a long-term, multi-story lease to Tokyo-based MUFG, one of the world’s leading financial groups, and a full top floor lease to global logistics leader SAP.
Together, these tenants enjoy a modern office environment with flexible floorplates, high-end contemporary interiors, indoor and outdoor collaboration areas, a first-floor quick-serve deli and an on-site property management office.
Earlier this month, DoorDash also signed a full-building, 354,435-square-foot lease for LPC’s newly completed and adjacent Grand 2 building. This brings both office buildings at The Grand at Papago Park Center to 100 percent leased.
“The fundamentals of the Tempe market meet all of the criteria we look for. Combined with the premier building quality of the Grand 1, its strong credit tenants, its multi-modal access and Lincoln’s vision makes this a particularly attractive purchase,” said Susquehanna Holdings Managing Partner Matthew Wideman. “The acquisition is a win for our company, Lincoln’s expertise in office development is a win for Tempe and the jobs are a win for Arizona.”
According to Wideman, Susquehanna Holdings tends to look long term and sees Phoenix positioned to economically outperform most major Western U.S. markets in the coming years and decades.
“It has been gratifying to guide the Grand 1 from pre-construction and lease-up through to its sale to such a high-quality buyer,” said Lincoln Property Company Vice President of Development Doug Klocke. “Susquehanna Holdings is an experienced owner that will maintain the quality of this premier building.”
The Grand at Papago Park Center offers approximately one-half mile of Loop 202 frontage, two freeway off-ramps and is bookended by two Light Rail stops, making it the first stop by light rail or by car coming out of Phoenix Sky Harbor International Airport and within minutes of Arizona State University. Together with a location on the north side of Tempe Town Lake, these advantages can cut employee commute times by 30 or more minutes compared to projects on the south side of the Lake.
The project was named after the adjacent Grand Canal, developed in the 1870s to bring water from the Salt and Verde rivers to Metropolitan Phoenix. The canal was relocated to run through The Grand project, creating a stunning central water feature surrounded by multi-use walking and biking paths.
Kevin Shannon, Ken White and CJ Osbrink from Newmark represented LPC in the sale of Grand 1. LPC serves as the developer, leasing agent and property manager for all office space at The Grand. More about The Grand at Papago Park Center is available at www.thegrandtempeaz.com.