U-Haul Holding Co., the well-known moving and storage company, has acquired a significant piece of Phoenix's skyline by purchasing the CenturyLink office tower at 20 E. Thomas Rd. for $23.7 million with plans to move its headquarters there, as reported by the Business Journal. This Midtown Phoenix tower, one of the largest high-rises in the Valley, is located merely a block away from U-Haul's existing corporate office.
The 25-story tower, bought from an affiliate of Bank of America, is Arizona's third-largest building and will be rebranded as The U-Haul Tower, according to the company's announcement last Friday. U-Haul expects to consolidate its regional workforce currently spread over a number of buildings, into this nearly 550,000-square-foot space and the move which aims to centralize operations for greater efficiency is slated to occur over the next 24 months, though not all the details about the transition have been publicly finalized, as reported by ABC15.
In what has been described as "a monumental transaction" by Eric Wichterman, a vice chair at Cushman & Wakefield who assisted in brokering the sale, acquiring the high-rise marks one of the largest owner-occupier office sales in the nation and signals U-Haul's reaffirmed commitment to the region, which is a significant belief by companies in the importance of maintaining a physical office presence, especially one that is of high quality according to a statement obtained by CoStar News.
The move to U-Haul Tower means more than just a change of scenery for the company and its approximately 1,600 employees but a potential shift in Midtown Phoenix's business landscape, the existing U-Haul headquarters have been a longtime fixture there. U-Haul's decision to hold on to roughly 15% of the high-rise for leasing out to existing tenants including engineering firm HDR, environmental firm SWCA, and accounting firm CLA, adds an interesting dynamic to its role as both corporate occupant and landlord this strategy was likely a response to the high vacancy rate the building faced before U-Haul stepped in as Sebastien Reyes, U-Haul Vice President, mentioned the company is "evaluating numerous possibilities with our existing campus footprint" as they look to maintain a strong presence in the area, as reported by CoStar News.
Adding the downtown tower to U-Haul's extensive real estate portfolio—which sprawls across more than 23,000 locations in North America—is indicative of the company's confident business outlook, even after the previous tenant CenturyLink's departure left the building with a significant vacancy space, U-Haul's real estate strategy is characterized by adaptive reuse and a reluctance to sell off assets, as suggested by the company's statements on plans for its properties in Phoenix.
