October 10, 2019 – Bridge Investment Group LLC’s (Bridge) subsidiary Bridge Office Fund Manager (Bridge Office) announced today the acquisition of Phoenix Gateway Center, a 439,584 square-foot Class A office campus located on North 44th Street in Phoenix, Arizona.
Consisting of two four-story buildings (One Gateway and Two Gateway) and one 11-story building (Three Gateway) within the growing 44th Street Corridor submarket, Phoenix Gateway Center is situated less than one mile from Sky Harbor International Airport and in close proximity to a variety of new retail and multifamily developments. The campus also features a blue-chip tenant roster from a diverse group of industries, and is within walking distance of a Valley Metro light rail station.
Originally built between 1984 and 1988, the office complex has recently undergone more than $4.7M in renovations and capital improvements to create a contemporary design with high-end finishes and amenities that appeal to Phoenix’s young and vibrant workforce. In line with the firm’s strategy to deliver next-generation office environments, Bridge plans to invest approximately $2.7M in further enhancements at Phoenix Gateway Center, including upgrades to lobbies, elevator cabs, outdoor space, common areas on the individual floors, the fitness center and conference room.
The population of Greater Phoenix is expected to grow from its current 4.8 million people to nearly 9.3 million by 2040. As a relatively young region, Greater Phoenix has a median age of 35.5 – two years younger than the national average – and its workforce benefits from the influx of new talent at nearby Arizona State University, University of Phoenix and Grand Canyon University. Considered a hub for finance, commerce, culture, entertainment and the government center, Arizona was ranked No. 1 on Forbes’ list of “Best States for Future Job Growth Demographics” this year. Phoenix Gateway Center is within a 30-minute commute for more than half of the Phoenix metro area’s labor market, which continues to lead all U.S. metro areas in job creation.
“While nearby Tempe North remains the leading submarket for office, explosive rent growth and high construction costs for top workplaces are fueling increased demand for the 44th Street Corridor — an area without any new speculative office development over the last decade due to a lack of available land sites,” said David McCleve, director of asset management for Bridge. “With its prime location and spacious, campus-like setting, Phoenix Gateway Center checks all of the boxes for our acquisition strategy. The building is poised to emerge as a new talent hub for both start-ups and established companies across Metro Phoenix.”
Phoenix Gateway Center is only a short drive from the affluent, amenity-rich areas of Camelback Corridor, Tempe Town Lake, Arcadia and Downtown Scottsdale, including Scottsdale Fashion Square, the largest mall in the state, and Biltmore Fashion Park, a 600,000-square foot luxury lifestyle center with more than 70 exclusive retailers and restaurants. A Hilton Doubletree Suites hotel is located adjacent to the property, offering 242 guest rooms, 17 flexible event spaces, onsite dining options and business amenities. Phoenix Gateway Center is also surrounded by an influx of new home construction, with median home prices in Metro Phoenix listed among the most affordable of any major market in the country.
The latest acquisition by Bridge Office marks the company’s second foray into the growing Phoenix market, more than doubling its portfolio in the region. In addition to Phoenix Gateway Center, Bridge also owns 3200 North Central, a 346,027-square-foot building that was recently reimagined through a series of capital improvements that delivered a state-of-the-art lobby, tech-equipped conference facility and a revamped fitness center.
Considered a fast-rising player in the U.S. commercial office market, Bridge has been increasingly active in the market including the acquisitions of the Offices of Flagler Station and Offices of Doral Square in Miami, Fl., Cornerstone Plaza in Sorrento Mesa, Ca., Sunrise Technology Park in Sunrise, Fla., Station Square in Silver Spring, Md., The Campus at Sunrise in Reston, Va., Denver West Business Park in West Denver, Co., One North LaSalle in Chicago, Ill. and O’Hare International Center in Rosemont, Ill.
Bridge Commercial Real Estate LLC, the operating company for Bridge Office, will oversee all leasing, property management and redevelopment work at Phoenix Gateway Center.
Office spaces will range from 1,426 square feet to 21,837 square feet. The renovations will begin immediately, with the first phase set to deliver in Q2 2020. Leasing will be led by John Bonnell, Brett Abramson, Chris Latvaaho, and Chris Beall with JLL.