USAA JV Pockets $49M for Phoenix Office Building

Norterra West Two. Image courtesy of Cushman & Wakefield

An entity managed by Silver Creek Development has picked up Norterra West Two, a 144,800-square-foot Class A office building in suburban Phoenix.

A joint venture of USAA Real Estate and Metro Commercial Properties Inc. sold the asset for $48.5 million, CommercialEdge data shows, with Argentic backing the deal with a $34 million acquisition loan.

The former owners are also the initial developers of the three-story property at 25800 North Norterra Parkway, situated along the Interstate 17 Black Canyon Freeway. The site is part of the Norterra master-planned community, as well as the Phoenix North Gateway submarket. The construction process stretched over the course of 16 months and wrapped up in the first half of 2021.

The project was initially envisioned as a speculative development, but following a direct approach of the developers to a Fortune 200 company in late 2019, the latter agreed to a build-to-suit scenario and long-term lease. According to CommercialEdge, tech company Cognizant is the lone tenant of the property.

The building is LEED certified and offers 50,000-square-foot floor plates, slab-to-slab ceiling heights of up to 15 feet and triple redundant stairwells. Wespac Construction was the general contractor. Cushman & Wakefield Executive Managing Director Chris Toci and Managing Director Chad Littell represented the seller in the transaction, while Managing Director Charles Essig worked for Silver Creek in-house.

Investing in Phoenix

The partners are also responsible for the development of the adjacent Norterra West One building that came online in 2016. That property is similar in size and design to Norterra West Two. In August 2018, an investment fund managed by JDM Partners acquired the building for $48 million.

In June, Silver Creek also picked up Ascend at Chandler Airport Center, a 130,642-square-foot office building in Chandler, Ariz. Irgens pocketed nearly $35 million for the property, which is fully leased to education technology firm Zovio. Sound Point Capital Management provided a $23.8 million acquisition loan.