Stream JV Kicks Off $29M Phoenix Office Reno
The owners expect to wrap up by the end of the year.
Vero Capital’s office investment platform—Vero A2R—and Stream Realty Partners have started work on a $29 million redevelopment at INISIO at Kierland, a 410,000-square-foot, two-building office campus in Scottsdale, Ariz. The project is estimated for completion in the fourth quarter of 2024.
Vero purchased the assets in two phases. In 2021, the firm bought Kierland I for $58 million from Velocis, backed by a line of credit from Column Financial, according to CommercialEdge. A year later, Vero acquired Kierland II for $47 million from LBA Realty, with financing provided by Western Alliance Bank, the same source shows.
The company first announced the renovation plans back in November 2023. Willmeng Construction is the general contractor while Zebra Projects and Good City Studio provided design services.
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Stream Realty Partners oversees the development and provides leasing services. The company recently signed leases at INISIO with Liberty Mutual, Healthcare Realty, as well as Prudential. Furthermore, Kierland I is now fully occupied.
The repositioning includes a 5,000-square-foot gym, hospitality-inspired lobbies and common areas, libraries, focus booths, as well as a 5,000-square-foot outdoor area featuring pickleball courts, among others. A new restaurant will also open on campus. Moreover, the renovation will bring five new speculative suites ranging between 3,900 and 7,700 square feet, slated for delivery in the fall of 2024.
Located at 16430 N. Scottsdale Road and 16260 N. 71st St., the two office buildings are more than 2 miles away from Arizona 101 Loop. Downtown Scottsdale and Phoenix are some 10 and 22 miles away, respectively.
Phoenix’s office vacancy improves, pipeline struggles
A recent CommercialEdge report highlights Phoenix’s office resilience superimposed over a growing national vacancy rate. While the U.S. rate grew to 18.8 percent—a 210-basis-point increase—year-over-year as of April, Phoenix’s vacancy rate slid down to 17.5 percent, decreasing by 80 basis points for the same period.
The metro’s pipeline is shrinking, at 650,385 square feet under construction as of April, representing 0.4 percent of existing stock. Meanwhile, other Sun Belt metros continue to have significant pipelines, including Dallas-Fort Worth at 4.9 million square feet, and San Diego with 3.7 million square feet under construction.
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