The Renaissance Square office complex in downtown Phoenix just fetched $151 million in a sale to funds managed by Oaktree Capital Management in Cypress Office Properties.
The two towers, retail square and other amenities represent about 1 million square feet of real estate in the block bounded by Adams, Central and Washington streets and First Avenue.
The deal closed Wednesday. An official close to the deal confirmed the sale price.
Hines U.S. Core Office Fund L.P. was the seller, and will continue to manage the buildings.
The new owners plan to spend $50 million upgrading the 25- and 27-story office buildings, which are easily recognizable by the sky bridge connecting them. They plan to begin renovations before April.
Scheduled for upgrades are the lobbies, plaza and third-floor conference center.
The buildings were designed by Emery, Roth and Sons Inc. and finished in 1987 and '89.
Tenants include Quarles and Brady; Jones, Skelton and Hochuli; Bryan Cave; Gammage and Burnham; the U.S. Attorney’s Office; Ernst and Young; and Gabriel Partners. The buildings are about 62 percent occupied today, according to Oaktree.
The Phoenix office market is growing well, according to a recent CBRE market report. It reports just a 17.8 percent vacancy rate in the third quarter of this year, the lowest since the third quarter of 2008. More than 800,000 square feet of office space was absorbed during the quarter, and the average asking lease rate rose 6.8 percent in the past year to $24 a square foot.
“We are committed to making a major investment to transform Renaissance Square into Phoenix’s premier office property and we fully expect this project to play a critical role in downtown’s continued evolution as a world-class business center,” said Mark Jacobs, managing director of Oaktree, in a press release.
Oaktree reports $100 billion in assets under management, and is headquartered in Los Angeles. Cypress is based in San Diego.