CIM Group has come through with financing for Stockdale Capital Partners’ Galleria Corporate Center, an approximately 550,000-square-foot creative office property in Scottsdale, Ariz. CIM Group provided the borrower with a $95.6 million bridge loan for the Phoenix-area asset.
Carrying the address of 4301-4343 N. Scottsdale Road in Old Town Scottsdale, Galleria Corporate sits roughly 10 miles east of downtown Phoenix. The three-story structure first opened its doors in 1991 as an indoor shopping mall. In 2000, the asset came under new ownership and underwent a transformation into an office destination before Stockdale and joint venture partner Oaktree Capital Management acquired it for approximately $68.2 million in 2003. In 2017, Stockdale recapitalized the property in a partnership with Jasper Ridge Partners.
Today, Galleria Corporate offers Class A office accommodations in the 130,000-square-foot building at 4301 Scottsdale and the 430,000-square-foot building at 4343 Scottsdale, which are connected via a skybridge. The property also features an adjacent 10-story parking facility.
CATCHING A LENDER’S EYE
Beyond its strong sponsorship, Galleria Corporate has a few notably positive attributes that would attract lenders, even during the current economic uncertainty. The property has become a favorite among high-profile tech firms. Yelp calls Galleria Corporate home, having inked an amended lease in 2015 for nearly 93,000 square feet of space, and Zillow is on the tenant roster as well, leasing 20,000 square feet since 2018. Indeed Inc. made a commitment to the property in 2017.
Additionally, while hardly unscathed by the consequences of COVID-19, the metropolitan Phoenix office market is weathering the storm. “At the beginning of June in-person tours began increasing and now tour activity is extremely high, especially with tenants that needed to pause touring the market back in March,” according to a second-quarter 2020 report by Colliers International. The Greater Phoenix area also recorded positive net absorption for the 33rd consecutive quarter, with 205,000 square feet. And in the Scottsdale South submarket, home to Galleria Corporate, Class A assets logged positive net absorption totaling roughly 22,800 square feet year-to-date and an average total vacancy rate of 8.1 percent for the quarter.