Mesa Corporate Center

EXECUTIVE SUMMARY

MESA CORPORATE CENTER

1001 WEST SOUTHERN AVENUE MESA, AZ 85210

MESA CORPORATE CENTER

1001 WEST SOUTHERN AVENUE | MESA, ARIZONA 85210

05 Executive Summary

17 Property Description

CAPITAL MARKETS AGENCY LEASING

CHRIS TOCI JERRY NOBLE, CCIM, SIOR Executive Managing Director Senior Director +1 602 615 0999 +1 602 229 5912 [email protected] [email protected]

CHAD LITTELL GREG MAYER Managing Director Senior Director +1 602 229 5987 +1 602 229 5905 [email protected] [email protected]

2555 E. Camelback Rd, Suite 400 Phoenix, Arizona 85016 ph:+1 602 954 9000 | fx:+1 602 468 8588 www.cushmanwakefield.com DOBSON ROAD

THREE FOUNTAINS PLAZA

ALMA SCHOOL RO AD GRACE DEVELOPMENT REDEVELOPMENT SITE MESA TOWER

VENUE VENUE VE A MESA POLICE GRO FIESTA DISTRICT STATION

SOUTHERN A

WES FIESTA COMMONS TWOOD

115 ROOMS

SOUTHERN 149 ROOMS AVENUE VILLAS 354 UNITS DOBSON ROAD

THREE FOUNTAINS PLAZA

ALMA SCHOOL RO AD GRACE DEVELOPMENT REDEVELOPMENT SITE MESA TOWER

EXECUTIVE VENUE VENUE VE A MESA POLICE SUMMARY GRO FIESTA DISTRICT STATION

SOUTHERN A

WES FIESTA COMMONS TWOOD

115 ROOMS

SOUTHERN 149 ROOMS AVENUE VILLAS 354 UNITS EXECUTIVE SUMMARY

THE OFFERING

Cushman & Wakefield of Arizona, Inc. has been retained as exclusive agent and advisor for the disposition of Mesa Corporate Center located at 1001 West Southern Avenue in Mesa, Arizona 85210 (the “Property”). Mesa Corporate Center was constructed in 2000 and is currently 94% leased to a well-balanced rent roll. The Property features a total parking ratio of 5.9/1,000 square feet and boasts attractive design and architectural detail. At 106,209-rentable- square feet, the two-story Class A office building is situated on 8.27 acres in the heart of the Fiesta District, the primary corridor for business in the City of Mesa. Its highly-desirable location, just north of a full-diamond interchange at the US 60 freeway and Alma School Road, allows the Property to access 1.6 million employees within a 30-minute drive time.

This Offering provides an opportunity to acquire an institutional- quality, Class A office development featuring (1) stable cash flow from investment-grade and blue chip tenants, (2) significant public and private capital investment into the Fiesta District, and (3) strong tenant demand driven by a dearth of Class A options near the confluence of the Loop 101 and US 60 freeways.

6 MESA MESA CORPORATE CORPORATE CENTER CENTER EXECUTIVE SUMMARY

INVESTMENT HIGHLIGHTS In-Place Contract Rents Below Market Likely strike pricing is substantially In-place contract rents of $19.90 per below Mesa Corporate Center’s $245 Investment-Grade & square foot are 17% percent below per square foot replacement cost. Blue Chip Tenancy market rates for the Property and Mesa Corporate Center boasts 74% 25% below peak Class A rates in the Class A Office Outperforming of the rentable area featuring the Superstition Corridor submarket. Mesa Submarket following investment-grade and Corporate Center offers cash flow The Competitive Set of properties near blue chip tenants: Allstate Insurance stability with an average annual rollover the Superstition Corridor collectively Company (S&P: AA-), Adtalem Global of 2.7% through the first three years. enjoy a vacancy rate of 10% and a Education, formerly DeVry Education weighted average asking rate of $24.50 Group, (NYSE: ATGE; S&P MidCap 400), Pricing Well Below Replacement per square foot. Class A office in this Allied Universal Security ($4.8B in 2016 Strike pricing is significantly below the corridor consistently outperforms the revenue), Teledoc (NYSE: TDOC), and peak asset pricing for office in Metro submarket and is a major relief valve Kimley-Horn. All have chosen to locate Phoenix between 2005 and 2008 of for tenants driven east of the Price in the Fiesta District due to its access $393 per square foot. Road Corridor. to labor, transportation, and amenities.

OFFERING TERMS

PRICE: Unpriced

NOI (FY) 2019: $1,174,938

TERMS: Cash TOURS END/ TBD OFFERS DUE:

MESA CORPORATE CENTER 7 BANNER DESERT GRACE DEVELOPMENT MEDICAL CENTER REDEVELOPMENT SITE

DOBSON FIESTA VILLAGE SQUARE GRACE DEVELOPMENT FURNISHED APARTMENTS 500 EMPLOYEES FIESTA PLAZA REDEVELOPMENT SITE FIESTA COMMONS DOBSON Your Neighborhood Pizza Joint PLAZA

3,000 EMPLOYEES MIXED-USE ALONG SOUTHERN SOUTHERN AVENUE 595 BEDS NEW RESIDENTIAL ON 140,000+ NORTH END OF SITE PATIENTS SEEN IN 2016 WILL PROVIDE ADDITIONAL BANNER FEDERAL WALKABLE AMENITIES CREDIT UNION SOUTHERN 149 ROOMS AVENUE VILLAS 354 UNITS MESA MESA COMMUNITY COLLEGE FIESTA COMMONS JOHN D RIGGS VETERANS STADIUM CENTER MESA POLICE FIESTA DISTRICT STATION 115 ROOMS

MESA

THREE 117 ROOMS 256 EMPLOYEES FOUNTAINS CORPORATE PLAZA CENTER 64 ROOMS

22,000+ STUDENTS WALKABLE AMENITIES LONGMORE LARGEST COMMUNITY COLLEGE RETAILERS: AMERICAN DISCOUNT FOODS, BIG LOTS!, DOLLAR TREE, WALGREENS ROAD DOBSON IN METRO PHOENIX RESTAURANTS: BOULDERS ON SOUTHERN, OFFERS OVER CARL’S JR., HIBACHI SUPER BUFFETT, FREEDOM 200 DEGREE PROGRAMS MCDONALDS GOLF COURSE

263 ROOMS FIESTA MALL SOUTHERN AVENUE VILLAS MCC PERFORMING ARTS CENTER ALMA SCHOOL ROAD ALMA SCHOOL

FIESTA DISTRICT 40 RESTAURANTS | 50 RETAIL STORES | 5 HOTELS 700+ ROOMS | 2 HOSPITALS 755 BEDS NEW OWNERS HAVE PLEDGED FIRST NEW HOUSING IN $30 MILLION INTO REDEVELOPMENT FIESTA DISTRICT IN 20 YEARS FIESTA CROSSING SEEKING HIGH TECH/MEDICAL TENANTS 354 UNITS NEW AMENITIES TO $41 MILLION COMPLEX COMPLEMENT CORPORATE USERS DELIVERED IN 2016

DOBSON FIESTA VILLAGE SQUARE GRACE DEVELOPMENT FURNISHED APARTMENTS 500 EMPLOYEES FIESTA PLAZA REDEVELOPMENT SITE FIESTA COMMONS DOBSON Your Neighborhood Pizza Joint PLAZA

MESA

THREE 117 ROOMS 256 EMPLOYEES FOUNTAINS CORPORATE PLAZA CENTER 64 ROOMS

263 ROOMS FIESTA MALL SOUTHERN AVENUE VILLAS MCC PERFORMING ARTS CENTER ALMA SCHOOL ROAD ALMA SCHOOL

BANNER DESERT GRACE DEVELOPMENT MEDICAL CENTER REDEVELOPMENT SITE FIESTA DISTRICT 40 RESTAURANTS | 50 RETAIL STORES | 5 HOTELS 700+ ROOMS | 2 HOSPITALS 755 BEDS NEW OWNERS HAVE PLEDGED FIRST NEW HOUSING IN $30 MILLION INTO REDEVELOPMENT FIESTA DISTRICT IN 20 YEARS FIESTA CROSSING SEEKING HIGH TECH/MEDICAL TENANTS 354 UNITS DOBSON FIESTA VILLAGE SQUARE NEW AMENITIES TO $41 MILLIONGRACE COMPLEX DEVELOPMENT FURNISHED APARTMENTS COMPLEMENT CORPORATE USERS DELIVERED IN 2016 500 EMPLOYEES FIESTA PLAZA REDEVELOPMENT SITE FIESTA COMMONS DOBSON Your Neighborhood Pizza Joint PLAZA

3,000 EMPLOYEES MIXED-USE ALONG SOUTHERN SOUTHERN AVENUE 595 BEDS NEW RESIDENTIAL ON 140,000+ NORTH END OF SITE PATIENTS SEEN IN 2016 WILL PROVIDE ADDITIONAL BANNER FEDERAL WALKABLE AMENITIES CREDIT UNION SOUTHERN 149 ROOMS AVENUE VILLAS Imagery ©2017 , DigitalGlobe, U.S. Geological Survey, USDA Farm Service Agency 354 UNITS MESA MESA COMMUNITY COLLEGE FIESTA COMMONS JOHN D RIGGS VETERANS STADIUM CENTER MESA POLICE FIESTA DISTRICT STATION 115 ROOMS

MESA

THREE 117 ROOMS 256 EMPLOYEES FOUNTAINS CORPORATE PLAZA CENTER 64 ROOMS

263 ROOMS FIESTA MALL SOUTHERN AVENUE VILLAS MCC PERFORMING ARTS CENTER ALMA SCHOOL ROAD ALMA SCHOOL

JACKSON COMMERCIAL

REAL ESTATE ROAD ALMA SCHOOL

LONGMORE FUTURE HIGH-TECH/ DIMENSION FINANCIAL & REALTY INVESTMENTS INC MEDICAL DEVELOPMENT

JACKSON COMMERCIAL REAL ESTATE

10 MESA CORPORATE CENTER FULL DIAMOND INTERCHANGE @ ALMA SCHOOL

Google 2017 EXECUTIVE SUMMARY

FIESTA DISTRICT supported by the City Council as the The District Vision creates next step in reshaping the area in a uniquely identifiable area and around the Fiesta District. This Economic Force with Abundant approval will allow Mesa to utilize for Mesa that is economically Opportunity economic tools like the Government Encompassing 1.2 square miles, the Property Lease Excise Tax (GPLET) vibrant, pedestrian friendly, and Fiesta District is reemerging as Mesa’s to incentivize new commercial and an active, urban destination. premier business district featuring retail development as well as secure cutting-edge industry clusters, a federal funds to enhance public areas, Revitalization of the Fiesta skilled workforce, easy market access, neighborhoods, and business districts. District will again transform this extensive infrastructure, and ample executive hotel accommodations. Over Fiesta Mall Poised for Redevelopment major City employment center the last several years, the area has With the exception of the Dillard’s benefited from more than $493 million and Sears’ corporately-owned, big- to the place of destination within in redevelopment efforts. box parcels, Fiesta Mall is now under the Metro area. private ownership and control. New Recent improvements to Southern ownership has publicly stated that Avenue’s infrastructure and hardscape they plan to invest more than $30 have enhanced the urban atmosphere million in redevelopment costs as by incorporating a pedestrian “One of the biggest adaptive reuse friendly environment with a variety projects in Metro Phoenix.” Ownership of entertainment venues, nightlife, is expected to begin redevelopment and mixed uses. The District is the efforts as early as January 2018 and City’s hub for advanced business and are anticipating the inclusion of financial services, health care, and office, medical, and education as education. well as dining, entertainment, and multifamily housing in order to Southwest Redevelopment Area provide a complete live, work, Adopted in 2016, the Southwest play environment for employees. Redevelopment Plan was unanimously

MESA CORPORATE CENTER 11 EXECUTIVE SUMMARY DOWNTOWN MIDTOWN PHOENIX PHOENIX SKY HARBOR P HOENIX AIRPORT DOWNTOWN TEMPE S C O T T S D ALE TEMP E

Fiesta Village Mixed-Use Redevelopment Plans MES A The northwest corner of Alma School and Southern Avenue, known as Fiesta Village, sat quietly through the economic recovery in Metro GRACE DEVELOPMENT REDEVELOPMENT SITE AD Phoenix but discussions have been ALMA SCHOOL RO MESA TOWER increasing between the owner, W.M. Grace Development, and the City of SOUTHERN A FIESTA COMMONS Mesa. Plans have not been finalized VENUE but initial concepts include a mix of office, retail, and multifamily housing uses.

Adjacent Retail Amenities GRO The 17-acre Fiesta Commons VE A Shopping Center, located on the TWOOD VENUE WES northeast corner of Southern 149 ROOMS Avenue and Alma School Road, is 163,000 square feet and

115 ROOMS SOUTHERN AVENUE VILLAS offers numerous walkable retail 354 UNITS conveniences. Chipotle Mexican Grill Dutch Bros Coffee, Jimmy John's, Longhorn Steakhouse, Olive Garden, Oregano's Pizza, Red Lobster and Starbucks are just a few of the restaurants residing in the Fiesta District.

12 MESA CORPORATE CENTER EXECUTIVE SUMMARY

Regional Destinations Mesa Community College (MCC) was Immediate Freeway Access Banner Desert Medical Center is the founded in 1965 and is the largest Located just north of the Superstition largest comprehensive hospital in community college in Arizona. MCC Freeway (US 60 ) east of the Loop 101, the East Valley and recently added has been a staple in the community for the Fiesta District is a destination for the $350 million Cardon Children’s nearly 50 years offering area residents the entire community made possible Medical Center to its’ campus. with online and campus-based degree through convenient freeway access. Continued medical expansion in the programs. With two campuses, five With an approved redevelopment plan Fiesta District will drive further office affiliate locations, and more than 180 in place, the Fiesta District is growing demand through the medical supply programs, degrees, and certificates, into a bustling destination for East chain conducting business with the MCC is host to well over 40,000 Valley residents to be enjoyed for many healthcare professionals at students annually. decades to come. Banner Desert.

MESA COMMUNITY COLLEGE FIESTA COMMONS

MESA CORPORATE CENTER 13 OFFERING LOCATION ANALYSIS MEMORANDUM

INFLUENCEEXECUTIVE OF THE EAST VALLEY SUMMARY LOOP 101 TRADE AREA • The East Valley Loop 101 Trade Area (the “Trade Area”) may inINFLUENCE fact play as large of a OFrole onTHE the Property’s future performanceEAST as VALLEYdoes the Superstition LOOP Corridor 101 due to its locationTRADE near theAREA confluence of the Loop 101 and the US 60 Freeways. The Trade Area is teeming with high-tech, high-wage jobs filled by a young and well-

educatedConfluence workforce. ofKnown Loop as 101the “High and TechUS 60Oasis in theThe Silicon East Desert”, Valley the Loop Trade Area101 Tradehas a shortage Area of Class(the “A” “Trade office Area”) space maywith ina fact 3.9% play vacancy as rate and prospectivelarge of a tenants role on are the spilling Property’s into the nearest future availableperformance Class “A” options as does along thethe USSuperstition 60 Freeway headingCorridor into Mesa. due to its location near the • At 89%confluence occupancy, of the the Property Loop 101 has and consistently the outperformedUS 60 freeways.the surrounding The submarkets Trade Area due to is the high-wageteeming employment with high-tech,spillover from high-wage the Trade Area. jobs Well-paidfilled professionals by a young are opting and well-educatedout of monotonous commutesworkforce. into the Scottsdale Known Airpark as the and “High have insteadTech returnedOasis to offices in the in Siliconthe East Desert”,Valley near theirthe Tradehomes. Daily Areatraffic has congestion a shortage along the of LoopClass 101 A officeFreeway is expectedspace to with double a over7.3% the vacancy next 20 yearsrate andand will only amplifyprospective this trend. tenants are spilling into the • With anearest total of 3.2 available million square Class feet A of options office product along over 25,000the US square 60 freeway feet that straddlesheading the east Loop into 101 FreewayMesa. from Broadway Road down to Intel’s Fab- 42 in Chandler, the Trade Area is one of the largest employmentScottsdale corridors Freeway in Metropolitan Congestion Phoenix. In fact, itPulling would be Employmentthe 10th largest submarket Southeast tracked by C&WAt if it 94% were occupancy, to be isolated theas its Property own submarket. It is recognized as the high-wage, advanced education has consistently outperformed the hub of the East Valley and is growing in strength with surrounding submarkets due to the the additions of Bank of America, Hanjin Shipping, high-wage employment spillover from Isagenix, Boeing, Isola, Microchip Technology, Wells Fargo,the ebay/PayPal, Loop 101Garmin, Trade and Area.many more.

CUSHMAN & WAKEFIELD 9

14 MESA CORPORATE CENTER EXECUTIVE SUMMARY

Well-paid professionals are opting out of monotonous commutes into the Scottsdale Airpark and have instead returned to offices in the East Valley near their homes. Daily traffic congestion along the Loop 101 Freeway is expected to double over the next 20 years and will only amplify this trend.

High-Tech Oasis With a total of 3.3 million square feet of office product above 25,000 square feet within one mile of the Loop 101 from the Red Mountain 202 south to the San Tan 202, the Loop 101 Trade Area would be the 12th largest submarket tracked by Cushman & Wakefield if it were to be isolated "High Tech Oasis in the Silicon Desert" as its own submarket. The Loop 101 Trade Area’s employment base enjoys opportunities in the fields of engineering, research, manufacturing, finance, architecture, marketing, and healthcare. It is recognized as the technology hub of Metro Phoenix 1,100 3,800 4,405 and is growing in strength with the Employees Employees Employees additions of Avnet, Bank of America, Boeing, EBay/PayPal, General Motors IT Group, Intel, Microchip Technology, Wells Fargo, and many more.

1,750 890 11,000 1,625 Employees Employees Employees Employees

MESA CORPORATE CENTER 15

PROPERTY DESCRIPTION PROPERTY DESCRIPTION

2-Story Class A Office

18 MESA CORPORATE CENTER PROPERTY DESCRIPTION

SITE DESCRIPTION

1001 West Southern Avenue ADDRESS ZONING C-2 Intermediate Commercial Mesa, Arizona 85210

CEILING HEIGHTS 9’ below the grid PARCEL 134-23-009C / 002D / 025A

SLAB-TO-SLAB 1st Floor: 13'2" HEIGHT 2nd Floor: 14'1" YEAR BUILT 2000 Direct site access along Southern Avenue and a second point of access on the west ACCESS side of Westwood Avenue. There are also SIZE 106,209 rentable square feet points of ingress and egress on the east side of Alma School Road and the north side of Grove Avenue.

FLOORS Two-story Class A office According to FEMA Flood Insurance Rate Map, Panel #04013C2190 dated FLOOD HAZARD December 3, 1993, the site is located in Zone X, an area inside the 500-year and SITE SIZE ±8.27 acres 100-year flood.

The Property features attractive 5.9/1,000 total parking ratio provided landscaping with a variety of colorful, PARKING RATIO by 623 parking spaces comprised of 102 LANDSCAPING year-round trees, flowers and grass. covered stalls and 521 uncovered spaces Landscaping is irrigated by an underground automated drip/spray PERCENT LEASED 94% sprinkler system.

MESA CORPORATE CENTER 19 PROPERTY DESCRIPTION

SITE IMPROVEMENTS

The building structure is supported on 4” turned-down concrete FOUNDATION/FLOORS slab (3,000 psi) on grade with spread footings at column locations over 4” aggregate base course. The building has the original modified-bitumen asphalt built-up roof ROOF with 90-lb granulated-cap sheet over 6-inches of mechanically- fastened rigid insulation. Exterior Insulation and Finish System (EIFS) is attached to the EXTERIOR WALLS exterior steel stud walls. Conventional storefront type system located around the building on WINDOWS both floors with tinted insulated glass set in aluminum frames. Typical tenant finishes include carpeted floors with either carpet or vinyl base. Walls are either painted or have vinyl-wall covering. TENANT SPACES The building standard ceiling tile is a 2’x 2’ lay-in acoustic tile ceiling and lighting is typically 2’x 4’ parabolic fixture with T-12 fluorescent tubes. One set of ADA accessible men’s and women’s restrooms is located on each floor. The restrooms are typical on each floor and are ADA accessible. The men’s restroom has three water closets, two urinals RESTROOMS and three surface-mounted sinks in polished-granite vanity tops. The women’s restroom has five water closets and three surface-mounted sinks in polished-granite vanity tops.

Water—City of Mesa Electricity—Arizona Public Service UTILITIES Sewer—City of Mesa Telephone—CenturyLink

An impressive 24’ lobby is centered at the junction of the east and north wings the building and provides excellent access to the central elevator lobby, building facilities central core, and common area LOBBY corridors. The ceilings are coved, painted gypboard with indirect florescent and recessed can lighting. Walls are finished with fabric wall coverings and stained 4” wood base. The floors are Jerusalem stone polished tile with granite accents.

20 MESA CORPORATE CENTER PROPERTY DESCRIPTION

SITE IMPROVEMENTS

Tenant upper-floor elevator lobby finishes include painted geoboard coffered ceilings, vinyl and cloth-covered walls, and carpeted CORRIDORS floors with Cherry stained base. Lights are typically ceiling-mount incandescent fixtures.

A single KONE hydraulic passenger elevator has a 3,500-lb. capacity and rises at a rate of 150 feet per minute. Hydraulic pumps and ELEVATORS reservoirs are located in first floor mechanical closets. The passenger cab is 5’-8” x 7’-0” and has a 60” center-opening double door.

2” domestic water service is equipped with a backflow preventer. All domestic water piping is copper. The 6” fire service water piping is PLUMBING ductile iron and equipped with backflow devices. Interior sanitary sewer piping is cast iron. All service connections are located at the first floor. Each tenant floor contains a janitorial closet with mop sink.

The main electrical disconnect is a 3,000-amp service located in the first-floor electrical room. The building is provided with 480/277 volts, ELECTRICITY 3-phase service with high-voltage lighting panels located in the two electrical closets on each floor, as are five low-voltage receptacle panels.

First floor cooling is provided by Trane split-systems with a total of 42 fan coils in ceiling plenums connected to condensing units on the roof. The second floor is cooled by 51 Trane rooftop package units ducted HVAC directly to tenant spaces. Trane split-system heat pumps were specified as typically Model #TWA060P400A1, 5-ton units. Package units were Trane Model #WCC060F400BF, 5-ton units with several 2-ton and 4-ton units. Heating is provided by electric resistance duct heaters. A fully sprinkled fire system with stairwell standpipes is provided to FIRE PROTECTION the building and all tenant spaces. Each of the two enclosed stairwells contains a 6-inch standpipe riser. An after-hours card access system for building entry is monitored at SECURITY SYSTEM each building entrance

MESA CORPORATE CENTER 21 22 MESA CORPORATE CENTER Source: Bureau of Labor Statistics; Brookings Institutel Pew Research MESA CORPORATE CENTER 2323

DISCLAIMER

This projection is based on assumptions reflecting a certain set of conditions. However, some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore, actual results achieved may vary from our estimates, and the variation may be material. Cushman & Wakefield extends no guarantees and makes no warranties, expressed or implied, with respect to this projection. In that regard, neither Cushman & Wakefield nor any affiliate, employee, officer, director, shareholder, or agent thereof, shall have any liability whatsoever arising from this projection or the actual results achieved.

The information and opinion contained herein are furnished as a real estate brokerage service by Cushman & Wakefield based upon comparative market data. It is not an appraisal. Cushman & Wakefield is not an MAI qualified appraiser, nor is it qualified or authorized to give legal or tax advice in regard to any proposed transaction. If you desire such advice, you are encouraged to consult with a professional appraiser, attorney and/or accountant.

CAPITAL MARKETS AGENCY LEASING

CHRIS TOCI JERRY NOBLE, CCIM, SIOR Executive Managing Director Senior Director +1 602 615 0999 +1 602 229 5912 [email protected] [email protected]

CHAD LITTELL GREG MAYER Managing Director Senior Director +1 602 229 5987 +1 602 229 5905 [email protected] [email protected]

2555 E. Camelback Rd, Suite 400 Phoenix, Arizona 85016 ph:+1 602 954 9000 | fx:+1 602 468 8588 www.cushmanwakefield.com 2555 E. Camelback Rd, Suite 400 Phoenix, Arizona 85016 ph:+1 602 954 9000 | fx:+1 602 468 8588 www.cushmanwakefield.com