An investment group led by Bourn Partners LLC has purchased the Williams Centre Technology Campus, home to AOL's remaining Tucson offices, for $37.67 million.
The deal, announced Tuesday, makes Bourn an owner of the property for the second time since developing it from 1999 to 2001. Bourn sold the four-building complex to a New York-based investment group for $30.6 million in 2002, according to information from the Pima County Assessor's Office.
The New York group, 5401 Williams Owner LLC, decided to sell the buildings mainly because they wanted to focus on East Coast holdings, said Mindy Korth, a CB Richard Ellis broker who helped negotiate the deal.
"They don't own any other assets west of the Mississippi," Korth said.
Located at 5401, 5421, 5431 and 5451 E. Williams Blvd., the technology campus includes a total of 196,179 square feet, according to CB Richard Ellis.
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The largest tenant, by far, is AOL, which has about 100,000 square feet of the complex under lease, said Don Bourn, Bourn Partners CEO. AOL had occupied three buildings in Tucson but was down to just one floor in the Williams Centre complex when it reduced its local work force to about 70 in last October.
Other tenants include FedEx Freight, Receivable Management Services Corp. and IFS Systems, according to CB Richard Ellis.
Regardless of the situation with AOL, Bourn said he views the property as a strong investment.
"We think it's great real estate," he said. "And we thought there would be good demand for lease space in those buildings for a long time to come."
The office market in Tucson is experiencing some softness related to problems in the housing and mortgage markets, according to reports by Tucson Realty & Trust Co. and Picor Commercial Real Estate Services. The supply of available space went up by about 200,000 square feet from the sudden closing of Tucson-based First Magnus Financial Corp., now in bankruptcy, Picor's report said.
Finding suitable replacement tenants for some of that space, as well as AOL's space, may be a challenge, said Thomas Nieman, an agent with Picor. Both AOL's space and the 70,000-square-foot First Magnus headquarters, 603 N. Wilmot Road, were construction for single, large tenants.
"It sort of narrows the field, because we don't have a lot of those," he said, referring to large office users.
Still, Nieman said both the First Magnus space and the Williams Centre space are top-quality and should have no problem eventually attracting tenants.
"People are still pretty confident that those are absolutely great, well-located pieces of office real estate," he said.