Tower Realty Purchases Northwest Valley Parcel… Plans 1 Million Sq. Ft. of Offices

Thu, 01/06/2011 - 00:00 -- Jeff

Phoenix - - A company formed by the newly created Tower Realty Trust Inc. of New York City (NYSE:TOW, Larry Feldman, chairman) paid just over $10.3 million to buy a 43.2-acre parcel at the northwest corner of Interstate 17 and the Loop 101 in Phoenix. The seller was a company formed by Randy Stolworthy of R.R. Stolworthy Inc. in Phoenix. The sale was brokered by Bob Lundstedt, Jim Wilson, Ashley Brooks and Tim Whittemore, all with Cushman & Wakefield of Arizona Inc. in Phoenix. Jim Bourg, v.p. of development for Tower in Phoenix, says the company intends to develop 1 million sq. ft. of office space on the property. Drawings from Butler Design Group in Phoenix show first phase structure totaling 168,000 sq. ft. Construction of that four-story building slated to start by year-end. Completion expected by fall 1998. Sundt Corp. in Phoenix has been hired as contractor. Development cost (land and building for phase one) estimated at $20 million. Financing now being arranged. In all, seven buildings are planned. Construction start on second structure likely to come after initial office is 50 percent leased. Bourg says the company is interested in acquiring existing office properties in the Valley . . . will also continue to pursue development deals. In October, BREW reported a company formed by Tower paying $11.54 million to purchase a 15-story, 213,823-square-foot office building at 3225 N. Central Avenue in Phoenix. The seller was a limited partnership formed by Phoenix-based investor Larry Van Tuyl. Tower Realty Trust is handling management and leasing. Two months ago, Tower Realty Trust announced an initial public offering of 13.7 million shares of its common stock at a price of $26 per share. Tower Realty Trust, a real estate investment trust (REIT), was formed to continue and expand the commercial real estate business of Tower Equities and Feldman Equities. Since 1985, those companies have been engaged in developing, acquiring, owning, renovating, managing and leasing office and retail properties. Upon completion of its offering, Tower Realty Trust will own interests in 21 office buildings totaling around 3.4 million sq. ft. Those properties are located in the New York City, Phoenix, Tucson and Orlando markets. Tower Realty Trust will focus on acquiring distressed office properties at a significant discount to replacement cost. Net proceeds from the offering will be used primarily to acquire office properties, and to repay debt on some of the company's properties. In May 1996, BREW reported a joint venture formed by Feldman and The Carlyle Group of Washington, D.C. (Frank Carlucci, et al., principals) paying $29.6 million to buy the 20-story, 357,000-square-foot Opus Midtown Plaza at 2800 N. Central Avenue in Phoenix. Get more from Feldman at (212) 768-9010. Reach Bourg at (602) 870-3400. Talk to Stolworthy at (602) 553-0082. Contact the Cushman & Wakefield agents at (602) 253-7900.