The retail complex was sold earlier this month for $136.5 million from General Growth Properties to CommonWealth REIT, a Massachusetts-based real-estate investment trust, said CB Richard Ellis Senior Vice President Bob Young, who was involved in brokering the deal.
The downtown Phoenix property went up for sale around last September and was marketed to both national and international companies. There were 14 offers, three of which had similar asking prices, but CommonWealth was picked because of its strong financial track record, Young said.
“(CommonWealth) purchased this for a long-term investment,” Young said. “They feel that they can do some things to improve it and make it better, and maybe add to it down the road.”
There are currently three parcels of available land that could be developed, but not likely until four to six years from now, Young said.
“I don’t think the general direction is going to change,” he said. “I think down the road there could be some changes in terms of what some of the pieces are going to be used for.”
Changes include signing a lease with Corner Bakery Cafe, a bakery and coffee shop chain that will likely open in the center this fall.
The former owners, General Growth Properties, filed for bankruptcy in 2009 and decided to sell the Arizona Center as part of their plan to emerge from debt by focusing on their core properties — shopping malls — and selling remaining properties.
“Overall I think it’s probably going to be a positive thing,” said David Roderique, president of the Downtown Phoenix Partnership. “The new owner appears to be financially much stronger, so they might be able to do some things to help improve it … add new stores, development parcels, expansions. There will probably be some good things that can come from this.”
Around 10 to 20 percent of the revenue at the Arizona Center comes from ASU students, Roderique said.
The past couple of years have been the best for the complex, he said. Developed to revitalize the downtown area, the center struggled in its early years but saw increased traffic with the opening of the Phoenix Convention Center and the ASU Downtown campus.
Though it is still not meeting original expectations, Roderique said he believes it will eventually.
“It just seems like the stuff that they have there is geared for tourism and a more mature audience,” said Lauren Dingess, a special education sophomore. More stores, restaurants with lower prices and bars geared to a younger audience would be welcome, Dingess added.
“I’m excited — I think that it has a lot of potential so it will be interesting to see if anything changes in a positive direction for that place,” she said. “They have the market for it — they just need to tap into it.”
Abigail Pacheco, a criminology sophomore, said the Arizona Center’s patrons are mostly older.
“Obviously they’re not targeting towards students,” she said, adding that many restaurants had high prices and there was a lack of advertising for both the center and any activities there.
Roderique said the new owners could and would likely do more to improve the Arizona Center for students at the Downtown campus, a short walk away.
“Obviously there are certain types of retailers, restaurants or certain types of activities that they could go out and try to lease to that would cater to a younger crowd,” Roderique said.
The new owners are looking to attract new tenants and more retail to improve the property right now, Young said, adding that the changes will likely not affect existing tenants. There are currently 23 businesses at the center.
Chris Mirza, general manager of Mi Amigo’s Mexican Grill, said the new ownership would likely not affect his business but did feel that they could do more to target downtown students. One thing Mirza wants to see changed is parking prices.
“They charge too much for parking,” he said. “If they charge less, students can park there and … it’s better for everyone.”
Heinrich Stasiuk, owner of Brick, a restaurant in the Arizona Center, agreed that the prices were too high even with validation, around $10 for all day parking according to Parkopedia.com.
The parking structure is owned by CommonWealth, Young said.
Stasiuk added that he would also like to see physical changes to the complex, but aside from that and parking, improvement should come from the businesses themselves, he said.
ASU students make up around five percent of Brick’s revenue, a number he said is low because of the lack of offerings the Arizona Center has for students and a younger audience.
But he remains optimistic about the influence CommonWealth will have on the center.
“I think they got some good plans for the Arizona Center,” Stasiuk said. “There’s so much competition downtown with CityScape opening up and stuff, so I think it will be a good, a fresh breath of air coming in.”
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