Younan Properties Capitalizes on Phoenix, Arizona Office Market; Yields 105% IRR
Los Angeles based firm achieves 105% IRR after just 17 months of holding
LOS ANGELES, CA (June 13, 2006) With its signature ability to capitalize on the strength of the office markets where its properties are located, Younan Properties, Inc. (YPI), has announced the $27.5 million sale of Four Gateway, a 140,000-square-foot Class A office building at 444 N. 44th St. in the heart of the 44th Street Corridor in Phoenix, AZ. Purchased by Beverly, MA-based Brookwood Financial Partners, the disposition yielded an impressive 105% return on investment for YPI after just 17 months of ownership.
Glenn Smigiel, Steve Brabant, Bob Young, Rick Abraham and Nancy Cueva of the Phoenix, AZ office of CB Richard Ellis represented both Younan Properties and Brookwood Financial Partners in the transaction. Glenn Smigiel, Steve Brabant and Bob Young also were on the team that represented Presidio Investments when that firm sold Four Gateway to YPI for $20 million in December 2004.
We recognized the opportunity to produce a significant yield in a very short time due to the fast recovery in the Phoenix office market, explained Zaya S. Younan, Chairman and CEO of Younan Properties, Inc. We increased building occupancy from 85% to 99% and reduced operating expenses by 28% as a result of our strong operational and continuous improvement capabilities. In Phoenix, we are still the fourth largest office owner and will continue to stay assertive in this market. This disposition is part of our plan to replace our smaller assets with larger, Class A high rises in key metropolitan office markets.
Built in 1998, Four Gateway is 99% leased to a tenant roster that includes ValueOptions and Eclipsys Corporation. The four-story, clean-lined property is strategically positioned in a campus-style setting just one mile from Sky Harbor International Airport and just a quarter mile south of the Loop 202 Freeway, offering easy access to the entire Phoenix marketplace.
Younan Properties came in at an exceptionally good time in the market cycle and was extremely pro-active in streamlining operations of the building across the board, Smigiel commented. By improving operational efficiencies and maintaining a strong tenant roster, YPI was able to enhance its return for investors in less than a year and a half of holding.
Younan Properties' current holdings in Phoenix include two Class A office properties in the vibrant North Central business corridor: Central Plaza, a 400,000-square-foot complex featuring a 20-story office tower and four garden office buildings, and Meridian Bank Tower, a 275,000-square-foot office building with a four-story annex.
Known for its detailed, hands-on approach to improving operational efficiencies while maintaining top building standards for tenants, Younan Properties' management team has more than four decades of experience in developing and managing commercial real estate in high growth markets throughout the United States. Headed by Zaya S. Younan, Younan Properties has accumulated more than $1.1 billion in real estate holdings since its inception in 2002. The company's national portfolio currently includes 21 Class A office properties totaling more than six million square feet.