Target Information

ElmTree Funds, LLC has successfully sold the property located at 2155 East GoDaddy Way in Tempe, Arizona, to Avnet, Inc., a prominent global technology distributor and solutions provider. This 150,000-square-foot Class A office building is set to become Avnet’s new global headquarters, with plans for the move slated for mid-2026. Prior to the sale, this site served as the corporate headquarters for GoDaddy, Inc.

The building, constructed in 2014, is equipped with a variety of amenities designed to foster productivity and employee well-being. Among its outdoor features are pickleball courts, a skate park, basketball and volleyball courts, and a soccer field. The interiors include a full-service kitchen, conference rooms, numerous huddle rooms, and a complete gym with locker rooms and shower facilities.

Industry Overview

The current landscape for commercial real estate in Phoenix is indicative of a resilient market, even amidst economic fluctuations. As of Q1 2025, the Phoenix office market encompasses 95.1 million square feet, registering a vacancy rate of 17.3%. This suggests a decently balanced market despite ongoing challenges.

Specifically, the South Tempe submarket is radiant with potential, showcasing significant activity, particularly from new technology firms. This area, alongside its robust infrastructure and proximity to key employers, positions itself as a prime locale for attracting businesses looking to establish themselves in the region.

The ASU Research Park stands as the premier development in South Tempe, housing numerous leading companies and offering shared amenities such as jogging and biking trails, extensive picnic spaces, and secure surroundings, making it attractive for corporate headquarters.

With access to major freeways and being just 15 minutes away from Sky Harbor International Airport, this location provides strategic advantages for firms seeking connectivity and an affluent workforce.

Rationale Behind the Deal

This transaction reflects a strategic decision by Avnet to consolidate its operations and enhance its corporate presence in a thriving market. The building’s diverse amenities are anticipated to support employee engagement and satisfaction, thereby aligning with Avnet’s long-term company culture and operational goals.

Furthermore, the acquisition represents a significant investment opportunity, showcasing ElmTree's adeptness in navigating a complex real estate environment. Such assets with modern facilities and competitive locational advantages are poised to deliver consistent returns, affirming the deal's attractiveness.

Investor Information

ElmTree Funds, LLC is a reputable real estate private equity firm based in St. Louis, Missouri. Established in 2011, the firm focuses on strategic investments in commercial real estate, specifically in the net-lease and build-to-suit sectors, predominantly targeting industrial properties. ElmTree prides itself on its successful track record in acquiring, developing, and financing commercial properties secured by investment-grade tenants.

The firm operates across primary and secondary markets in the U.S., with a commitment to long-term investments that promise stability and sustainable revenue. Their approach integrates an extensive understanding of market dynamics, which has positioned them as a respected player in institutional investing.

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In assessing the viability of this investment, it is evident that ElmTree Funds has executed a commendable transaction that aligns with their strategic investment philosophy. The sale of 2155 East GoDaddy Way to Avnet presents a strong case for future growth, given the building's premium location in a burgeoning tech corridor.

Moreover, with Avnet's commitment to moving their global headquarters into this facility, it underscores confidence in the long-term sustainability of the Phoenix office market. The modern amenities and attractive features of the property are likely to bolster employee retention and attract top talent, enhancing Avnet's operational success.

Overall, this investment fortifies ElmTree's portfolio with a high-quality asset while simultaneously catering to a leading company’s needs in the technology sector, thus indicating a strategic alignment that should serve both parties well for years to come.

Given the current dynamics of the Phoenix commercial real estate landscape and the strategic merits of this deal, it stands to be a commendable investment opportunity that demonstrates resilient market behavior and investor confidence in high-potential regions.

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