Clarion Partners JV Closes Big-Dollar Phoenix Disposition

Esplanade I

A partnership between Monarch Alternative Capital and Tourmaline Capital Partners has finalized the acquisition of The Esplanade, a four-building office complex totaling 906,459 square feet in Phoenix’s Camelback East submarket.

The seller is a joint venture between Clarion Partners and LBA Realty. While the sale price was not disclosed, the deal is valued at $385 million, according to the Phoenix Business Journal.

Monarch Alternative Capital and Tourmaline Capital Partners funded the purchase with a $352.6 million variable interest rate loan originated by CIM Group, Maricopa County records show. The four Class A buildings last traded in late 2015, when the current sellers shelled out $279 million to acquire the LEED Silver-certified asset, CommercialEdge data shows.

The Esplanade

The complex includes Esplanade I at 2425 E. Camelback Road, Esplanade II at 2525 E. Camelback Road, Esplanade IV at 2575 E. Camelback Road and Esplanade V at 2555 E. Camelback Road, covering a combined 6.9 acres. The 218,254-square-foot Camelback Esplanade III is currently owned by Transwestern and was not part of the sale.

Esplanade V

While most of the multi-tenant structures reach 11 stories, Esplanade V rises 10 stories. It is also the newest building of the four structures that were developed in 2001. All four buildings feature a parking ratio of 3 spaces per 1,000 square feet and offer floorplates between 24,153 and 26,474 square feet. On-site amenities include a conference and event center, a fitness center and collaboration spaces.

The new owners plan to build upon the most recent renovation that was completed 2019, with a capital improvements plan that includes amenity expansions, upgrading the lobby and roof deck, as well as refurbishing the interconnecting plaza.

Based on CommercialEdge data, the tenant roster includes WeWork, Greystar, Cushman & Wakefield and Gensler, among others. At the time of the transaction, The Esplanade was more than 85 percent occupied.

As of January, the office vacancy in Greater Phoenix fell 40 basis points month-over-month, dropping to 14.9 percent, below the national average of 15.7 percent, according to CommercialEdge data.