Apex Capital Investments purchased Grand2 — a 352,000-square-foot, nine-story office building in Tempe, Ariz. — from Lincoln Property Company for $187.5 million, or $534 per square foot. The building is fully leased to DoorDash, the San Francisco-based food delivery behemoth. The deal, which was completed last month, was the largest office deal in Phoenix and the fifth-largest in the country in 2020.
“Grand2 is a stand-out building across the board,” said Lincoln Property Company Senior Executive Vice President David Krumwiede. “Its amenities and location exceed the highest market standards, and it is stabilized by a full-building, long-term credit tenant that is exploding with growth, especially during the COVID-19 pandemic.”
Office investment and leasing activity declined last year due to the pandemic, which has kept many people working at home rather than in the office. However, Grand2’s prime location and long-term tenant made this property extremely attractive to investors in an otherwise lackluster market.
The property was developed by Lincoln Property Company as a speculative project in 2019 and, upon completion, it was quickly leased to DoorDash. Shortly thereafter, in early 2020, LPC started marketing the property for sale before the pandemic disrupted the economy. This timing enabled potential buyers to tour the building prior to lockdowns and social distancing protocols.
Grand2 is the second of 12 total buildings in the Grand at Papago Park Center mixed-use development in Tempe, which is located on the north side of Tempe Town Lake along the Loop 202 freeway. The development totals 350 acres and 1.8 million square feet of office space with another 1.4 million square feet spread across multifamily, retail and hotel space. The building is LEED Silver certified.
Lincoln Property Company sold Grand1 in 2019 to Susquehanna Holdings Ltd. and is fully occupied by Mitsubishi UFJ Financial Group and SAP. This is Apex Capital Investment’s first purchase in the Phoenix office space for rent market.