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Published:   August 30, 2013
Volume:   XIX    Number:   34

KIERLAND OFFICE SELLS FOR $29.3 MILLION . . . FORECLOSED ASSET LAST SOLD FOR $53.3 MILLION

Scottsdale - A 175,441-square-foot office building located within the Kierland mixed-use project in Scottsdale that previously sold for $53.3 million ($303.81 per foot) in 2007, has been sold to a venture for $29.3 million ($167 per foot). KO Scottsdale LLC, a joint venture formed by Hines Interests Limited Partnership in Houston, Tex. (Gerald Hines, principal) and PCCP LLC of El Segundo, Calif. (Jed Lassere, man. dir.), purchased the Kierland One office project at 16430 N. Scottsdale Road in Scottsdale. The seller in the cash sale was Kierland AZ LLC, a company formed by Massachusetts Mutual Life Insurance Co. in Hartford, Conn. The special servicer was Cornerstone Real Estate Advisors LLC in Hartford, which is an indirect subsidiary of Massachusetts Mutual Life Insurance Co. (aka Mass Mutual). The seller was represented through Barry Gabel, Mindy Korth and Chris Marchildon of CBRE in Phoenix. The vacant four-story structure was developed in 1999. The previous owner of the property lost the asset to foreclosure. In December 2010, BREW reported the office building scheduled to be sold at a trustee's sale in 2011. Kierland One secured a loan with an original principal balance of $32.28 million. The loan was issued to Kierland One LLC. That company was formed by Pacific Life Insurance Co. and KBS Realty Advisors in Newport Beach, Calif. The Pacific Life/KBS Realty venture defaulted on the loan that was issued by MassMutual. In February 2007, BREW reported a company formed by Pacific Life and KBS Realty Advisors paying $53.3 million ($304.20 per foot) to acquire the Kierland office property. BREW has previously reported Hines and Pacific Coast Capital Partners (PCCP) buying and selling office and commercial properties in the Phoenix area. This is the first time the companies joined forces on an investment in the Valley. Sources say Hines is interested in buying additional office buildings in the Phoenix area. At year-end 2012, a company formed by Hines paid $81 million ($268.03 per foot) to acquire a 302,209-square-foot office project at the southwest corner of 24th Street and Camelback Road in Phoenix. The 8-story property, with an address of 2375 E. Camelback Road, was originally developed by Hines in 2000. In December 2005, BREW reported Hines selling the property to a Germany-based firm for $107 million ($354 per foot). Chris Anderson, managing director for Hines in Phoenix, is at (602) 385-4000. Lassere is the contact at PCCP . . . (310) 414-7870. Jim Gallagher is the contact at Cornerstone Real Estate Advisers . . . reach him at (310) 234-2525. Call the CBRE agents at (602) 735-5555.


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