The priciest corner of Camelback Corridor will soon get its first office project in seven years.
Houston-based developer Hines plans to announce details Thursday for 24th at Camelback II, an 11-story, 300,000-square-foot Class A office mid-rise project. Rents are set for $40 to $44 a square foot, depending on the floor.
"The location is about as good as it gets," said Bill Olson, vice president/designated broker with Hines.
Originally Hines considered putting luxury condos on the property, which the company has owned since 2001, he said. But the proliferation of condos along Camelback and increasing office rents cemented plans to create a new office mid-rise building.
The proposed office building is next to the original eight-story, 302,000 square foot Hines building on the southwest corner of Camelback and 24th Street, which last May sold to German company GLL Properties for $113 million. That deal set a square-foot record, at $373.
Construction for Camelback II is expected to begin in June and to be completed in the fall of 2008. It’s the last empty parcel on the corner, so the office construction will be the last for the corner unless a nearby building is razed.
Each floor has between 25,000 and 38,000 square feet of rentable space.
Grubb & Ellis/BRE Commercial has been selected to handle leasing the building. Vacancy rates for office in the area have been hovering around 5 percent, which is considered extremely tight.
Several businesses have already called about the tower’s space. Interest is primarily coming from the financial, legal, real estate and insurance segments, said Tom Jacobs, a senior vice president at Grubb & Ellis. No pre-lease deals have yet to be signed, but no one is outwardly cringing that the rents are in some Chicago and less expensive areas of Manhattan.
"We’re seeing that tenants are willing to pay the premium to be here, . . . (because of) the central location, freeway access and best amenities in town."
Hines is giving select real estate and business professionals a sneak peek of the project’s design at a private reception Thursday. There Hines will share project details, from the building exterior’s look and parking to the granite floors and office layouts.
Hines sought neighborhood input from the start, which has been integral to making sure there wouldn’t be any surprises when seeking city approval for the 143-foot project, Olson said. The site is surrounded by commercial zoning.
Opposition from vocal neighbors about building height stymied the former Trump-Bayrock project, a 140-foot hotel-condo project, at the site of the former Hard Rock Cafe at 26th Street and Camelback. In that spot, the building’s maximum height was limited to 75 feet.
The Hines project is moving ahead smoothly, Olson said. It’s also been pre-certified LEED-CS by the U.S. Green Building Council.
"It’s our goal that upon completion of the building it will be LEEDs certified," he said.
The Camelback area, as of the end of last year, was fetching average rents of $36.20 a square foot, according to Cushman & Wakefield of Arizona. However, some new leases are now going for more than $40 a square foot.
This is Cache. Article appeared here: http://www.azcentral.com/news/articles/0213biz-hines-ON.html
by Yvette Armendariz – The Arizona Republic
