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A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
OFFERING MEMORANDUM | OWNER/USER INVESTMENT OPPORTUNITY
This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (3/12/2020) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.
Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.
This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.
OFFERING MEMORANDUM | OWNER/USER INVESTMENT OPPORTUNITY
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
KATHLEEN MORGAN, CCIM Healthcare Investment AdvisorManaging DirectorP (602) 952-3815 [email protected]
TRISHA TALBOT, CCIM Healthcare Investment AdvisorManaging DirectorP (602) 952-3880 [email protected]
YOUR TEAMMICHELLE RAE Healthcare Investment AdvisorAssociateP (602) 952-3816 [email protected]
3
1 2PROPERTY DESCRIPTION
Property DescriptionFloor PlatesLocal Aerial
Surrounding Hospitals Map Largest Employers Map/List
3AREA & MARKET OVERVIEW
General Phoenix Overview Anthem General Overview
Anthem Office | Phoenix Office OverviewArizona Healthcare Real Estate
Market Analysis | Phoenix 4Q 2019
EXECUTIVE SUMMARY
Executive SummaryProperty Summary
Investment Highlights
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
OFFERING MEMORANDUM | OWNER/USER INVESTMENT OPPORTUNITY
4
1
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
EXECUTIVE SUMMARYExecutive SummaryProperty Summary
Investment Highlights
5
EXECUTIVE SUMMARYNewmark Knight Frank, as exclusive advisor, is pleased to present the unique opportunity to acquire Anthem Corporate, a premier two building office and medical office complex, totaling ±64,473 SF, located in the elite Phoenix suburb of Anthem.
The property’s strategic location provides prominent visibility from, and immediate access to the Interstate 17 and the major regional business center of North Scottsdale.
3719 W. ANTHEM WAY is a one-story and fully leased ±4,448 rentable square feet medical office building with two (2) long term tenants.
3715 W. ANTHEM WAY is a two-story, ±60,025 rentable square foot office building with three (3) tenants in ±15,431 rentable square foot.
The rest of the building is vacant and in shell condition. Both buildings were built in 2007.
Anthem Corporate presents an ideal opportunity for an owner/user to purchase a high quality asset for their company’s growth, access a high quality labor force, and cash flow from current tenants. At a purchase price of $8,060,000, which is $125.00 a square foot, this asset is well below replacement costs.
ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
PROPERTY ADDRESS 3715 - 3719 W. Anthem Way, Anthem, Arizona
ASKING PRICE $8,060,000.00 / $125 PSF
BUILDING AREA ±64,473 Square Feet
CURRENT VACANCY
3719 W. ANTHEM WAY: Medical Office Building: 100% occupied, 1- story, ±4,448 rentable square feet medical office building with two (2) long term tenants.
3715 W. ANTHEM WAY: ±60,025 rentable square foot, 2 story office building that is 75% vacant, ideal for an owner/user.
YEAR BUILT/RENOVATED 2007
PARCEL NUMBER 203-03-542A
SITE AREA ±219,107 SF / 5.03 AC
ZONING Commercial Office
PARKING RATIO 4.4 / 1,000
PROPERTY SUMMARY
3715
3719
BELA ROSE BELA ROSE APARTMENT APARTMENT
HOMESHOMES
ANTHEMANTHEMCIVICCIVIC
BUILDING BUILDING
W Anthem WayW Anthem Way
N Venture Dr
N Venture Dr
- 17,276 VPD- 17,276 VPD
6ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
OWNER/USER OPPORTUNITYAnthem Corporate provides an owner/user with up to ±44,594 rentable square feet of shell vacant space while also having cash flow of five (5) existing tenants.
WELL BELOW REPLACEMENT COSTAs land value and construction costs continue to soar in Anthem and the Greater Phoenix Metro, Anthem Corporate is an opportunity for an owner/user to acquire this asset significantly below replacement cost.
SUBMARKET TROPHYAnthem Corporate, at 12.6% of the competitive submarket inventory, represents a prominent location in an affluent suburb, drawing local talent and boosting workforce wellbeing.
LOCATION & VISIBILITYSuperior visibility from I-17, with average daily traffic volume of 63,820 vehicles per day.
SHOPPING & AMENITIES4-minute drive from the Outlets at Anthem, a Greater Phoenix shopping destination center containing about 40 national retailers, including Coach, Ralph Lauren, Michael Kors, Ann Taylor, Calvin Klein, and Banana Republic.
ANTHEM EARNINGS POPULATIONHigh earning population. Median income of $101,626, is 62% higher than that of Phoenix metro area, and the median net worth, at $321,722, is 175% higher.
7
INVESTMENT SUMMARY
ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
PROPERTY DESCRIPTIONProperty Description
Floor PlatesLocal Aerial
Largest Employers Map/List2
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
PROPERTY DESCRIPTIONProperty Description
Floor PlatesLocal Aerial
Surrounding Hospitals MapLargest Employers Map/List
PROPERTY DESCRIPTION
9
PROPERTY INFORMATIONSQUARE FEET 63,473 RSF
YEAR BUILT 2007
TYPE OF CONSTRUCTIONTilt up concrete walls, concrete slab on grade, steel post and truss structure. 2nd floor wood decking with light weight concrete coating
LOAD FACTOR 13%
NAME OF ASSOCIATION Anthem Community Council
FIRE LIFE SAFETY & SECURITYSPRINKLER SYSTEM Sprinkler system throughout
FIRE PANEL LOCATION Main electric room (S.E.) Announcer in main lobby
FIRE RISER LOCATION N.E. & S.E. (Accessible from outside door)
STAND PIPE LOCATIONS N.E. & S.E. (Accessible from outside door)
SPARE SPRINKLER HEADS N.E. & S.E. (Accessible from outside door)
MONITORING PANEL Sprinkler system throughout
CONTROL PANEL Main electric room (S.E.) Announcer in main lobby
FIRE EXTINGUISHER LOCATIONS IN COMMON AREAS Maricopa County Sheriff Department
FIRE DEPARTMENT JURISDICTION
+ NON EMER NUMBERDaisy Mountain Fire Department
POLICE DEPT JURISDICTION + NON EMER NUMBER Maricopa County Sheriff Department
ACCESS SYSTEM Electro-magnetic access front door and motion sensing latches at side doors
HVAC SYSTEMTYPE OF SYSTEM Roof Top placed package units & spit systems
MANUFACTURER Trane
SIZE CAPACITY Ranging from 2-5tons
TYPE Six (6) split units, five (5) package units
EMS SYSTEM/EMS SERVICER N/A
ACCESS Through roof hatch 2nd floor janitors closet
BUILDING ACCESSBUILDING HOURS Monday - Friday: 8:00am-5:00pm
Saturday & Sunday Closed
ENTRANCE DOORS LOCKING & UNLOCKING
PROCEDURESAfter hours – Scan card/key accessBuilding & Suites – Key access
ELEVATORSSERVICE PROVIDER Arizona Elevator Solutions
EQUIPMENT ROOM 1st floor directly behind elevator
INSPECTION MONTH Quarterly
ELEVATOR EQUIPMENT Schindler Hydrolic Elevator
ROOFACCESS LOCATION Roof hatch located in 2nd floor janitor closet
TYPE OF ROOF SYSTEM Rolled asphalt roof with elastomeric coating
WARRANTY N/A
PARKINGTOTAL NUMBER OF
PARKING SPACES249 (69 Covered Spaces, 167 Uncovered Spaces, 13 Handicap Spaces)
ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
PROPERTY UTILITIES
WATERDOMESTIC WATER LINE LOCATION Plumbed throughout the building for additional build out
SERVICE PROVIDER Epcor Water
LANDSCAPESERVICE PROVIDER Sun State
TYPE OF LANDSCAPE Rock landscape with assorted native desert trees and plants
BACKFLOW VALVE LOCATIONS NW side of building
WATER HEATER LOCATIONS Janitor closet on 1st floor
ELECTRICMAIN AND SHUT OFF LOCATION Main electric room 1st floor S.E. side of building
ELECTRICAL ROOM LOCATIONS S.E. & S.W. 1st floor
SERVICE PROVIDER APS
ELECTRIC SERVICE 277/408 3-phase
GAS – N/ATELEPHONE
TELEPHONE ROOM LOCATIONS S.E. & S.W.
SERVICE PROVIDER CenturyLink/Cox
WASTE DISPOSALSERVICE PROVIDER Waste Management
LOCATIONS & CAPACITY OF DUMPSTERS One (1) 4 yd dumper located in dumpster enclosure on south side of property
PICK UP DAYS Tuesday & Friday
RECYCLING DUMPSTERS N/A
INTERNETSERVICE PROVIDER Cox & Century Link / Fiber optic service is available in the area
10ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
11
PROPERTY FLOORPLATES
OCCUPIEDOCCUPIED
OCCUPIED
OCCUPIED
AVAILABLEAV
AIL
AB
LE
AVAILABLE
1ST FLOOR FLOORPLATE
ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
2ND FLOOR FLOORPLATE
12
PROPERTY FLOORPLATES
FULL FLOOR AVAILABLE
R
ADVENTURE ADVENTURE PLAYGROUND PLAYGROUND & SPLASH PAD& SPLASH PAD
BELA ROSE BELA ROSE APARTMENT APARTMENT
HOMESHOMES
THE ENCLAVE AT ANTHEM THE ENCLAVE AT ANTHEM
SENIOR LIVINGSENIOR LIVING
ANTHEM COMMERCE PARKANTHEM COMMERCE PARK
GATEWAY GATEWAY OFFICE PARKOFFICE PARK
DAISY MOUNTAIN DAISY MOUNTAIN RAILROADRAILROAD
ANTHEM VETERANS ANTHEM VETERANS MEMORIALMEMORIAL
ANTHEM ANTHEM MARKETPLACEMARKETPLACE
Black Canyon Fwy
Black Canyon Fwy - 61,448 VPD- 61,448 VPD
W Anthem
Way
W Anthem
Way- 17,276 VPD
- 17,276 VPDN
Vent
ure D
r
N Ve
ntur
e Dr
ANTHEM CIVIC ANTHEM CIVIC BUILDINGBUILDING
ANTHEM ANTHEM
VA CLINIC (CBOC
VA CLINIC (CBOC))
HONORHEALTH HONORHEALTH MEDICAL GROUP MEDICAL GROUP GAVILAN PEAK GAVILAN PEAK
N Gavilan Peak PkwyN Gavilan Peak Pkwy
13ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
H
H
H
Abrazo Arrowhead Hospital18701 N 67TH AVE, GLENDALE, AZ 85308
20.9 MILES
Abrazo Scottsdale Campus3929 E BELL RD, PHOENIX, AZ 85032
23.9 MILES
Mayo Clinic Hospital5777 E MAYO BLVD, PHOENIX, AZ 85054
24.5 MILES
HonorHealth Scottsdale 7400 E THOMPSON PEAK PKY, SCOTTSDALE, AZ 85255
26.7 MILES
HonorHealth Deer Valley Medical Center 19829 N 27TH AVE, PHOENIX, AZ 85207
15.5 MILES
HonorHealth Sonoron Health & ER Center3343 N 32ND AVE, PHOENIX, AZ 85085
7.2MILES
1414
SURROUNDING HOSPITALS MAP
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
H
H
H ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
3715 W ANTHEM WAY 3719 W ANTHEM WAY
1
7,174 EMPLOYEES
2
6,648 EMPLOYEES
17
560EMPLOYEES
3
6,471EMPLOYEES
4
6,111EMPLOYEES
9
1,120EMPLOYEES
71,890EMPLOYEES
8
1,300EMPLOYEES
12
1,000EMPLOYEES
13
950EMPLOYEES
14
820EMPLOYEES
15
800EMPLOYEES
16
800EMPLOYEES
2,034EMPLOYEES
6
3,000EMPLOYEES
5
10
3,700EMPLOYEES
LARGEST EMPLOYERS MAP
11
1,000EMPLOYEES
15ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
A N T H E M C O R P O R A T E
AMERICAN EXPRESS 18850 N 56TH ST, PHOENIX, AZ 85050 7,174 EMPLOYEES
MAYO CLINIC 5777 E MAYO BLVD, PHOENIX, AZ 85054 6,648 EMPLOYEES
UNITEDHEALTH GROUP 20414 N 27TH AVE, PHOENIX, AZ 85027 6,471 EMPLOYEES
HONEYWELL 1860 W ROSE GARDEN LN, PHOENIX, AZ 85027 6,111 EMPLOYEES
USAA FINANCIAL SERVICES 1 N NORTERRA PKWY, PHOENIX, AZ 85027 3,700 EMPLOYEES
DISCOVER FINANCIAL SERVICES 2402 W BEARDSLEY RD, PHOENIX, ARIZONA 85027 3,000 EMPLOYEES
PETSMART 19601 N 27TH AVE, PHOENIX, AZ 85027 2,034 EMPLOYEES
COX COMMUNICATIONS 1550 W DEER VALLEY RD, PHOENIX, AZ 85027 1,890 EMPLOYEES
HONORHEALTH 19829 N 27TH AVE, PHOENIX, AZ 85027 1,300 EMPLOYEES
WASTE MANAGEMENT OF ARIZONA 2137 W WILLIAMS DR, PHOENIX, AZ 85027 1,120
EMPLOYEES
CIGNA HEALTHCARE OF ARIZONA 25600 N NORTERRA PKWY, PHOENIX, AZ 85085 1,000 EMPLOYEES
ABRAZO HEALTHCARE 18701 N 67TH AVE, GLENDALE, AZ 85308 1,000 EMPLOYEES
BANNER HEALTH 20325 N 51ST AVE, BLDG 9, GLENDALE, AZ 85308 950 EMPLOYEES
MIDWESTERN UNIVERSITY 19555 N 59TH AVE, GLENDALE, AZ 85308 820 EMPLOYEES
EMPEREON MARKETING 3561 W BELL RD, PHOENIX, AZ 85053 800 EMPLOYEES
TRIWEST HEALTHCARE ALLIANCE 15810 N 28TH AVE, PHOENIX, AZ 85053 800 EMPLOYEES
DISCOUNT TIRE 20225 N SCOTTSDALE RD, SCOTTSDALE, AZ 85255 560 EMPLOYEES
LARGEST EMPLOYERS LIST
16ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
3
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
AREA & MARKET OVERVIEW
General Phoenix Overview Anthem General Overview
Anthem Office | Phoenix Office OverviewArizona Healthcare Real Estate Market Analysis | Phoenix 4Q 2019
The U.S. Census Bureau named Maricopa County the fastest growing county in the country for three consecutive years. In 2019, Phoenix added 68,800 jobs. This is an increase of 3.2% year-over-year, and more than double the U.S. employment growth at 1.4%.
The influx of white-collar jobs and low cost of living has attracted new residents to the Valley from all over the country. Phoenix’s growth is nearly three times the national rate. Moody’s Analytics predicts another 490,030 people to move to the Valley in the next first years, an increase of 9.8%.
GENERAL PHOENIX OVERVIEW
18ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
Anthem is a suburb located just north of Phoenix. It’s an affluent market with employers American Express, Honeywell, Discover, Vanguard, Axon (Taser) and several hospital systems located there or close by. Anthem’s median income household income is $101,626, or 62% higher than the Phoenix metro area. Anthem’s median net worth per resident is $321,722, 175% higher. 61% of jobs in Anthem’s surrounding major employers are in Healthcare and Finance/Insurance.
HonorHealth is currently building the $170 million, 210,000 square-foot Sonoran Medical Center. The state-of-the-art facility will feature 24-hour emergency care. 40 inpatient beds, and particular expertise in obstetrical, gynecological, and orthopedic surgery and care. Nearby, American Express just completed a fourth 300,000 SF building, expanding its 90-acre campus, that house an additional 3,000 employees. Nationwide Insurance and is currently developing it’s a neighboring 136-acre site where they plan to build a new regional headquarters housing thousands of employees.
ANTHEM GENERAL OVERVIEW
LEADING EMPLOYERS IN OR COMING TO THE ANTHEM REGION
ANTHEM DEMOGRAPHICS 2019
PHOENIX DEMOGRAPHICS 2019
±4,885,176 SF POPULATION
$62,609 MEDIAN
HH INCOME
$116,858 MEDIAN
NET WORTH
$269,800 MEDIAN
HOME VALUE
ANTHEM VS PHOENIX
±25,795 SF POPULATION
$101,626MEDIAN
HH INCOME
$321,722 MEDIAN
NET WORTH
$360,347MEDIAN
HOME VALUE
19ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
20ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
PHOENIX OFFICE OVERVIEW
Anthem’s office market represents a strategic, niche opportunity for buyers. The market consists of only 18 buildings, totaling 510,640 SF of office space. Currently, no new office buildings are under construction. Anthem’s vacancy rates are declining. At their peak in 2011, Anthem’s vacancy rate was 32.3%; at 4Q 2019, it was only 17.9%. Average gross rental rates are up, increasing 21.9% to $25.49. Further, the average rental rate still hasn’t it its 2007 of $28.64. Accordingly, there’s a good potential the rental rates could increase more than 12.4%
ANTHEM OFFICE OVERVIEW
The Phoenix Metropolitan Statistical Area (MSA) recorded its 18th consecutive quarter of positive net absorption. Total vacancy continued to decrease, falling further below pre-financial crisis levels to 14.3%, as office-using employment in Phoenix reached almost 2.2 million jobs in the third-quarter, a 13.1% increase over the 2007 peak.The average asking office rent increased 5.6% over last year to $26.73/SF. Driven by increasing demand for Class A office space, this rental rate is $1.38/SF, or 5.4%, above the prior peak recorded in the first quarter of 2008. Acquisitions kept pace with the third quarter of 2019 at more than $500 million. This put 2019’s annual total at roughly $2.2 billion, matching transaction volume in 2018 and signaling continuing investor confidence in sustainable underlying market fundamentals.
PHOENIX OFFICE OVERVIEW
AVERAGE SALE PRICE PER SQUARE-FOOT INCREASED 12.3% FROM$209/SF IN 2018 TO $235/SF IN2019
ARIZONA PASSED A BILL TOEXEMPT VETERANS BENEFITS FROMSTATE TAXES, INCENTIVIZING MOREDEMAND FOR MEDICAL OFFICE INTHE PHOENIX METRO
AMBULATORY SURGICAL CENTER INMESA TRANSACTED THROUGH ADOUBLE ESCROW, RESULTING IN A$1.1 MILLION GAIN
REAL ESTATE MARKET ANALYSIS
RESEARCH 4Q 2019
© NEWMARK KNIGHT FRANK | 2019 RESEARCH | 1
TOP SALES TRANSACTIONS
Building Address Sale Price Price/SF Square Feet
Rome Towers 1760 E. Pecos Rd. Gilbert, AZ $26,000,000 $199.69 130,205
Pueblo Nuevo 301 E. Bethany Home Rd. Phoenix, AZ $11,950,000 $142.14 84,070
West Valley Medical Center 140 N. Litchfield Rd. Goodyear, AZ $11,400,000 $321.64 35,443
Desert Mirage Medical Plaza 12361 W. Bola Dr. Surprise, AZ $6,275,000 $166.04 37,791
ARIZONA HEALTHCARESALES TRENDSArizona’s healthcare real estate market is expected toremain healthy in 2020. It is a stable long-term investmentfueled by the demands of an aging population trend.Locations are being driven by a strategy of convenientpatient access to care specific to a medical service specialtyand a practice’s target payer mix.
While transaction volume remained consistent at $452million in 2019 from $450 million in 2018, the average saleprice per square-foot increased 12.3% from $209/SF to$235/SF.
In the fourth quarter, there were four transactions for medicaloffice buildings over 25,000 square-feet in size. WoodsideHealth, who owns several other medical office properties inPhoenix, purchased Rome Towers. Hammes Partners, a well-known player in the medical office asset class, purchasedthe West Valley Medical Center. Dr. Gary Kawesch, a high-net-worth investor in Los Angeles, acquired Pueblo Nuevooffice complex in Central Phoenix for $12 million.Boomerang Capital Partners, a hedge fund, purchased aphysician-owned medical office building in Surprise.
In addition to aging demographics trends, Governor DougDoucey and the State Senate approved a bill this quarter to
exempt veterans’ benefits from state taxes in a move toattract more inbound migration by former militarymembers to the state. Statistically, this demographic hashigher healthcare expenditures than the averagepopulation and will drive additional demand to the medicaloffice properties in the metro.
YEAR-OVER-YEAR INVESTMENT SALES COMPARISON
2018 2019 Percent Change
Price $209 PSF $235 PSF 12.4%
Sales Volume $450 million $452 million 0.4%
CURRENT MARKETRents increased 3.2% in the fourth quarter of 2019 to$25.42/SF, driving a 4.8% appreciation in rental ratessince 4Q 2018.
Vacancy rates increased 50 Bps, or 0.5%, to 14.5% inthe 4th quarter. CamelSquare, one of the largestmedical offices in the Camelback Corridor, wasdemolished to make way for a $300 million mixed-usedevelopment to include a NBA/WNBA training facility,boutique hotel, Class A office and retail space. Inaddition, the Phoenix medical office market wasshocked by St. Luke’s Medical Center’s closing inNovember after serving the Valley for over 100 years.This runs counter to large expansions of otherhealthcare networks including Dignity, Banner andAbrazo Health, but is in line with a shift away frominpatient hospital visits toward outpatient and urgentcare services.
Active projects under construction increased to259,161 SF, the highest since 2Q 2017. This sharpincrease signals renewed confidence in a sustainable
ARIZONA HEALTHCAREREAL ESTATE MARKET ANALYSIS
© NEWMARK KNIGHT FRANK | 2019 RESEARCH | 2
TRISHA TALBOTManaging Director, [email protected]
KATHLEEN MORGANManaging Director, [email protected]
ARIZONA HEALTHCAREREAL ESTATE MARKET ANALYSIS
NNEETT AABBSSOORRPPTTIIOONN
$24.38 $24.77 $24.63 $25.44
12.0%
13.0%
14.0%
15.0%
$23.50
$24.00
$24.50
$25.00
$25.50
$26.00
1Q19 2Q19 3Q19 4Q19
Pric
e Pe
r Squ
are
Foot
Rent Vacancy
24,720
-22,342
13,842
-76,117-100,000
-50,000
0
50,000
100,000
1Q19 2Q19 3Q19 4Q19
Squa
re F
eet
Absorption
AASSKKIINNGG RREENNTTSS // VVAACCAANNCCYY RRAATTEE
MARKET ANALYSIS
Total Inventory Vacancy Rate Quarterly Absorption Average Rent Under Construction
Current Quarter 19,506,344 SF 14.5% -76,117 SF $25.44 259,161 SF
Prior Quarter 19,509,952 SF 14.0% 13,842 SF $24.63 86,000 SF
Year over Year 19,466,883 SF 13.7% 131,859 SF $24.26 145,499 SF
RENTS INCREASED 3.2% THROUGHTHE 4Q 2019, THE HIGHESTQUARTERLY INCREASE THIS CYCLE
SF UNDER CONSTRUCTIONINCREASED OVER 200% IN 4Q TO259,161 SF, THE HIGHEST IN 2YEARS
ST. LUKE’S MEDICAL CENTER CLOSED AFTER SERVICING CENTRAL PHOENIX FOR OVER 100 YEARS WITH OVER 700,000 SF OF HEALTHCARE SERVICES
national economic expansion, allowing developers tocontinue to capitalize on nation-leading fundamentalsand population growth in Phoenix. The largest of theseprojects includes the 90,000 SF Sierra Bloomdevelopment in Scottsdale set to deliver in 4Q 2020 andthe 58,647 SF Mercy Medical Commons II project inGilbert completing in February 2020.
MICHELLE [email protected]
ARIZONA HEALTHCARE REAL ESTATE MARKET ANALYSIS | PHOENIX 4Q 2019
21ANTHEM CORPORATE | 3715-3719 W ANTHEM WAY, ANTHEM, AZ
A N T H E M C O R P O R A T E3715-3719 W ANTHEM WAY, ANTHEM, AZ
KATHLEEN MORGAN, CCIM Healthcare Investment AdvisorManaging DirectorP (602) 952-3815 [email protected]
TRISHA TALBOT, CCIM Healthcare Investment AdvisorManaging DirectorP (602) 952-3880 [email protected]
YOUR TEAMMICHELLE RAE Healthcare Investment AdvisorAssociateP (602) 952-3816 [email protected]