Week in Review - July 11th, 2014

With Land Swap, Rivulon Development is Underway 

With the transfer of 5.345 acres from Nationwide Realty Investors--as master developer--to LA Fitness in exchange for 17.06 acres at the northwest corner of the same development, Phase I of the 252-acre Rivulon mixed-use development in Gilbert is officially underway. When complete, Rivulon will total 3.1m SF of new office space and 500k SF of integrated restaurant and retail use on a 252-acre parcel at the northeast corner of the Loop 202 San Tan Freeway and Gilbert Road. According to Nationwide, construction is set to begin on Phase I in the Fall of 2014. 

Formerly Distressed Student Housing in Tempe Sold for $38.7m 

Block 1949—the “Class A” student housing and multifamily development located east of the southeast corner of McClintock and University Drives—was acquired by a tenancy-in-common (TIC) group comprised of Consolidated Investment Group (CIG) and CWS Capital Group (CWS) for $38.7m or $172k per door. CIG is the majority interest in the new ownership structure—acquiring 85% of the TIC interest in the property in an all cash purchase. In an interesting wrinkle to the deal, CIG was founded by David Merage who is the brother of Greg Merage, whose MIG Capital acquired the nearby Quadrangles Apartments in April of this year. 

Jabil Circuit Manufacturing Facility Sold in Tempe 

The soon-to-be-vacant manufacturing and distribution facility that served as the regional headquarters for Jabil Circuits, Inc. was sold yesterday for $11.415m or $60.73 per square foot in an all cash deal. Jabil will vacate the property over the next two to three months after announcing it would cease operations at the facility in September of last year. The buyer was Denver-based Alliance Commercial Partners through its Phoenix Director of Acquisitions, Curt Kremer.  

Pecan Promenade Shopping Center Sold for $19m 

CIRE Equity—a California-based private real estate investment company in the value-add and opportunistic investment space—has acquired the Target-anchored Pecan Promenade shopping center in South Phoenix. The $19m purchase price represents $135 per square foot and was financed with $15m in new purchase money debt with Prime Finance Partners. The sellers were James D Tate and J Kenneth Tate of Miami-based Tate Capital. Tate previously sold three of the pad spaces for a combined $4.244m for a total payout on this deal of $23.244m, net of acquisition and operating costs. 

Anthem Chase Bank Branch sells for Over $700 Per Square Foot 

Florida-based Real Estate Investment Trust, National Retail Properties ($NNN), has sold a single tenant pad leased to Chase Bank for $3,534,000 or $785 per square foot. The buyers were a group of investors out of Chicago who financed the deal with $1,464,140 in new debt with Lakeside Bank. Located within the North Phoenix master-plan community Anthem at 39516 N Daisy Mountain Drive- the 4,500 SF bank branch was constructed in 2007 as an out-parcel of the “Anthem Crossing” neighborhood shopping center.

With Land Swap, Rivulon Development is Underway

By: Paul Dionne | Vizzda

Master Plan for Rivulon by Butler Design Group

With the transfer of 5.345 acres from Nationwide Realty Investors--as master developer--to LA Fitness in exchange for 17.06 acres at the northwest corner of the same development, Phase I of the 252-acre Rivulon mixed-use development in Gilbert is officially underway. 

The transfer was strictly a barter or trade transaction, with no consideration or boot changing hands. The site transferred to LA Fitness is planned for a 45k SF gym, while renderings of Phase I call for a total of 246k SF in new office development in four buildings. Following the transfer, Brent Berge of Berge Auto Group acquired the parcel from LA Fitness for $3.7m--or $15.03 per square foot--in a sale-leaseback transaction with a 15-year firm term and three 5-year extensions.

When complete, Rivulon will total 3.1m SF of new office space and 500k SF of integrated restaurant and retail use on a 252-acre parcel at the northeast corner of the Loop 202 San Tan Freeway and Gilbert Road. According to Nationwide, construction is set to begin on Phase I in the Fall of 2014. Phase I is comprised of roughly 30 acres with 13.5 acres dedicated to retail development, including an inline space and two pads in addition to the LA Fitness and 16.5 acres dedicated to developing the 246k SF office mentioned above. The remaining phases call for 116.3 acres of office use and 57.5 acres of retail use, with a partially assembled fifty acre parcel to the southeast that has yet to be rezoned.

Vizzda tracked the sale history of the assemblage that will become Rivulon going back to 2006, when Kimco Realty and DeRito Partners acquired a portion of the site from Continental Homes for $13,172,585. DeRito made three additional acquisitions that year with Donald Oliphant as a partner totaling $15,275,930 and one additional acquisition with Kimco in 2007 for $8,094,010, bringing their total to $21,266,595. Nationwide began acquiring the assemblage from Kimco, DeRito and Oliphant partnerships, as well as historical land holders in several transactions totaling at least $88,571,022.

LA Fitness’ portion was tracked back to a 1996 acquisition by Arnold Schlessinger and Ron McRea in which they acquired 20 acres at the southeast hard corner of Gilbert & Pecos Roads for $700k. Exxon Mobile acquired the site in 2000 for $3,267,318 and sold back everything except 2.95 acres at the hard corner for $3.25m in 2004. Less than two years later, Schlessinger and McRea sold the remaining parcel for $10m to Walt Brown and Tim Dollanger of Diversified partners, who--in turn--sold to LA Fitness for $12,083,799 in June of 2007.

To Contact the Author:
Paul Dionne - pdionne@vizzda.com