PHOENIX, March 22, 2021 /PRNewswire/ — TerraCap Management LLC, a privately held investment firm with its headquarters in Naples, Florida, announced today the acquisition of Koll Cotton Center for $30.9 million. Located in Phoenix, AZ, Koll Cotton Center is a seven-building, single-story office/flex park totaling 225k square feet. Built in 2000, the property is located in Cotton Center Business Park, a 286-acre mixed-use development that totals over 3 million square feet of real estate.
Steve Hagenbuckle, Founder and Managing Partner of TerraCap said, “The TerraCap team is excited about taking over and continuing the blueprint that BKM laid out at Koll Cotton Center. We believe that they did a great job with the property, and we look forward to continuing such work during our ownership.”
Koll Cotton Center is located in the Airport submarket, which has seen minimal new construction over the past decade. The Airport submarket also had a positive net absorption in 2020 despite the effects of the COVID-19 pandemic. The property itself is less than 5 miles from Sky Harbor International Airport and is just south of I-10, granting connectivity to all of metro Phoenix.
TerraCap plans to implement several capital projects at Koll Cotton Center during their hold period, including replacing the roofs, improving the exteriors, and repositioning the vacant suites to make them more useable and appealing to new tenants. These improvements will allow for the opportunity to quickly reposition the asset by leasing up the vacancies and increasing rates. Matthew Hart, TerraCap Partner and Director of Investment Analytics, said, “We’re excited to continue our growth into the Phoenix market, especially with such an institutional quality property with an ideal location for this product type.”
The seller BKM was represented by Mark Detmer of JLL. Voya Investment Management provided debt financing for TerraCap with assistance from Kevin MacKenzie and Jason Carlos from JLL’s debt team. CBRE was hired for the leasing assignment, and BKM was retained as property manager.