Information on the Target

The property located at 8530-8550 S. Priest Drive in Tempe, Arizona, has been sold for $20.5 million. It comprises two office buildings totaling 188,960 square feet, alongside 12.64 acres of vacant land. The buildings were constructed in 2003 and underwent renovations in 2019, ensuring modern amenities and appeal. The site features a two-level parking garage and benefits from excellent visibility and accessibility, being directly adjacent to Interstate 10 and Loop 202.

This strategically positioned property provides ideal conditions for diverse uses, such as a corporate campus or a multi-tenant space. It is nestled within the Emerald Center business park, which includes nearby amenities like restaurants, retail outlets, hotels, and entertainment options, contributing to a robust business environment.

Industry Overview in the Target’s Specific Country

The office sector in the United States is currently experiencing a transformation influenced by changes in work patterns and increased demand for flexible working environments post-pandemic. In cities like Tempe, Arizona, the office market is recovering, with a current 13.6% direct vacancy rate as of the second quarter of 2025. This marks a continuous decline in office vacancy rates, indicating a trend toward increased occupancy and demand for high-quality office spaces.

Moreover, the Tempe area features a considerable amount of office space, totaling 12.8 million square feet. The recent influx of companies, including Avnet Inc. establishing its new global headquarters in the region, highlights the area's attractiveness to businesses seeking both space and community.

As businesses adapt and begin to seek new spaces that cater to evolving work dynamics, the demand for well-located office buildings with modern amenities is paramount. The property’s nearby access to major highways and comprehensive surrounding amenities positions it well for sustained interest and investment.

Additionally, the development of active transport and commercial infrastructure is underway, which is expected to elevate the overall attractiveness and functionality of the Tempe office market. Continued development will inherently boost demand for well-equipped office spaces, thus presenting a favorable landscape for real estate investments.

The Rationale Behind the Deal

The acquisition of the S. Priest Drive property aligns seamlessly with Widewaters' investment strategy, which focuses on acquiring high-quality assets that possess strong value-add potential. The combination of developable land and the existing structure provides a unique opportunity to enhance the asset's viability and future earnings potential.

According to Edward Shagen, Vice President of Development at Widewaters, the property is situated in a highly sought-after market, reducing inherent investment risk while providing potential for significant returns on capital through strategic renovations or repositioning efforts.

Information About the Investor

Widewaters is a vertically integrated real estate organization with over 50 years of experience in various property types, including retail, hospitality, residential, and office/industrial sectors across North America. With a proven track record, Widewaters has developed or acquired over 13 million square feet of institutional-quality real estate valued at more than $2 billion.

With a robust in-house team capable of managing acquisitions, development, leasing, and property management, Widewaters leverages its operational expertise to optimize investments, ensuring high-quality outcomes and investor satisfaction. The organization's approach incorporates an entrepreneurial mindset, allowing it to navigate and capitalize on evolving market conditions effectively.

View of Dealert

From an investment perspective, the acquisition of the property at S. Priest Drive presents a compelling opportunity for Widewaters. The location, combined with the existing infrastructure and the potential for enhancements, signifies a strong value proposition for both immediate and long-term yields. Given the declining vacancy rates in the area, the likelihood of securing tenants at favorable rates further bolsters the investment case.

This being the third notable transaction by Transwestern in the Phoenix/Tempe area indicates a positive trend in market attention and capital investment, suggesting a broader confidence in the region's economic resurgence. With active development surrounding the site, Widewaters may well achieve an advantageous market position through strategic investment and proactive management of the property.

Overall, the strategic nature of this acquisition aligns well with market trends that favor flexibility, quality, and location in the office sector. Such positioning reinforces the outlook for prospective capital appreciation and operational income, making it a notable investment opportunity for the firm.

Considering all factors, the investment not only reflects current market conditions but also prepares Widewaters to leverage long-term growth potential, making it a sound investment choice.

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