OAKTREE/CYPRESS STRIKES AGAIN . . . SPENDS $91.7 MILLION FOR SCOTTSDALE OFFICES

Photo Credit: Raintreecorp.com

Scottsdale – A joint venture formed by Oaktree Capital Management L.P. in Los Angeles, Calif. (Howard Marks, Bruce Karsh, co-chairmen) and Cypress Office Properties in San Diego, Calif. (Ron Lack, Mark Wayne, principals) paid $91.7 million $273.82 per foot) to buy 334,889 sq. ft. of office space in two buildings at Raintree Corporate Center in Scottsdale. The office properties, which were sold by an affiliate of iStar, include a 163,179-square-foot structure at 8800 E. Raintree Drive and a 171,710-square-foot building located at 8888 E. Raintree Drive. Raintree Venture Owner LLC, a company formed by Equus Capital Partners Ltd. in Philadelphia, Pa. (Daniel DiLella, pres.) and iStar Inc. in New York City, N.Y. (NYSE:STAR, Jay Sugarman, CEO), was the seller. The deal was brokered by Kevin Shannon and Brad Burton of NKF Capital Markets  in So. Calif., and CJ Osbrink of NKF Capital Markets in Phoenix, along with Bryan Taute and Charlie Von Arentschildt of CBRE in Phoenix. The two, three-story structures, called Raintree Corporate Center III and Raintree Corporate Center IV, are 89 percent leased on the average. Taute and Arentschildt have been leasing the space and are retaining that assignment. The office buildings are part of the 858,490-square-foot Raintree Corporate Center. That 54-acre project is at the northeast corner of the 101 Loop and Raintree Drive. Maricopa County records show Raintree III/IV Property Owner LLC (Oaktree/Cypress entity) acquired the properties with a $60.77 million loan from Zions Bancorp through its administrative agent California Bank & Trust. In September 2015, BREW reported Equus and iStar paying $69.04 million ($200 per foot) to acquire the two buildings, which at that time had 344,890 sq. ft. of rentable space. In September 2011, BREW reported iStar (formerly iStar Financial Inc.) foreclosing on the two buildings that were later sold to the Equus/iStar. The structures were developed in 2007 and 2008 by Cavan Investments in Scottsdale. In January 2017, BREW reported Oaktree and Cypress forming a venture and paying $151.25 million ($156.12 per foot) to purchase the nearly 1 million-square-foot Renaissance Square office towers in downtown Phoenix. That two-building, 968,790-square-foot office plaza is comprised of the 25-story, 494,004-square-foot One Renaissance Square at 2 N. Central Avenue and the 28-story, 474,786-square-foot Two Renaissance Square at 40 N. Central Avenue. Oaktree, a global investment manager with more than $124 billion in assets, provides the equity for the purchases. The investments are operated by Cypress Office Properties, a real estate investment and operating company. Both of the privately-held firms have a history of owning office buildings in the Valley. Oaktree, which specializes in opportunistic and value-added deals, has also invested in multi-family properties in the Phoenix area. In addition to the ventures with Oaktree, BREW has reported Cypress ventures spending $88 million to buy 644,211 sq. ft. of office space in three Valley properties. Find out more from Mark Jacobs of Oaktree Capital at (213) 830-6300. Talk to Lack and Wayne of Cypress Office Properties at (858) 831-9240. Christopher Locatell is the contact at Equus Capital Partners . . . (215) 575-2349. The NKF agents in So. Calif. are at (310) 491-2000. Contact Osbrink at (602) 952-8300. Reach the CBRE agents at (602) 735-5555.

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