Providence Real Estate Group has acquired an office building right in the heart of Old Town Scottsdale.
Located at 4110 N. Scottsdale Road, San Diego-based Providence paid $44 million to acquire Scottsdale Financial Center I from banking giant Goldman Sachs. The building was built in the 1980s and spans more than 100,000 square feet. Boise, Idaho-based A10 Capital was the lender on the deal, according to real estate database Vizzda.
Current tenants at Scottsdale Financial Center I include RJP Estate Planning, Edward Jones and Matthews Real Estate Investment Services. Matthews has the signage at the entrance to the building off Scottsdale Road. The three-story building sits atop a two-story, below-ground parking garage.
Cushman & Wakefield’s Tim Whittemore and Patrick Schrimsher, the listing brokers for Scottsdale Financial Center I, are marketing multiple available or “available in the future” listings for the building from 1,165 square feet up to 10,099 square feet.
On its website, Providence Real Estate Group said Southern California and Arizona are its primary target markets with an investment strategy that’s “core-plus” and “value-add” to its acquisitions. The company could not be immediately reached for comment.
The acquisition of Scottsdale Financial Center I is the company’s third known acquisition in the Phoenix market. In 2020, Providence bought both the Element at Kierland office complex and the adjacent Mesquite Corporate Center for $36.77 million.
Goldman Sachs had paid $28.5 million to acquire Scottsdale Financial Center I from a Pennsylvania-based entity in 2016, according to an affadavit of property value recorded in Maricopa County.
Excluding the sale of the Banner Health Center Plus medical office at The Grove, Scottsdale Financial Center I fetched the highest price among office sales across the Valley to date in 2023, according to real estate database Vizzda. Coming up behind Scottsdale Financial Center I was Florida-based The Related Group’s acquisition of Icon Kierland for $32 million in March, according to Vizzda.
2022 saw much higher office sale valuations
Still, the $44 million that Providence spent to acquire Scottsdale Financial Center I wouldn’t crack the top 10 of office deals from 2022.
Monarch Alternative Capital and Tourmaline Capital Partners’ acquisition of four towers at the Esplanade campus commanded a massive $353 million price tag, which was the top deal last year. Goldman Sachs had a hand in a top 10 deal, which was a $56.5 million sale of the Promenade Corporate Center and now known as the Cardone Corporate Center.
Phillip Hernandez, senior research manager for Colliers’ Arizona office, said there’s been about $165 million of office sales volume to date during the second quarter of 2023, which is down 26% compared to Q1 2023 and down 69% year-over-year compared to Q2 2022. Rising interest rates, Hernandez said, has played a role in the drop in volume.
Some of the other notable office deals this year include Chandler Corporate Center I & II; Chandler Corporate Center IV in a separate transaction; and the historic Luhrs Tower’s office building and parking garage in downtown Phoenix.
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