Sunbelt buys up SunCor holdings

by J. Craig Anderson and Ryan Randazzo The Arizona Republic July 16, 2010 03:56 PM
Sunbelt Holdings, a local developer involved in some of metro Phoenix's largest master-planned communities, has been buying up commercial real estate from the Pinnacle West Capital Corp. subsidiary SunCor Development Co., which is in the process of selling off its assets.

Sunbelt President John Graham said Friday that the Scottsdale company had just finalized a deal to purchase about 1,900 acres of northwest Valley commercial and industrial property from SunCor, whose parent Pinnacle West also owns utility Arizona Public Service Co.

The latest Sunbelt Holdings purchase included more than 1,650 acres of commercially zoned land in the Palm Valley area of Goodyear, Avondale and Litchfield Park, more than 200 acres of commercial land along Interstate 10 and a 440,000-square-foot industrial building, Graham said. He would not disclose the sale price.

It was the latest in a series of Sunbelt Holdings acquisitions of former SunCor projects, which include a planned Hyatt Regency hotel site at Hayden Ferry Lakeside on the south side of Tempe Town Lake; the Sanctuary Golf Course in Scottsdale; and the SunRidge Canyon Golf Course in Fountain Hills.

Sunbelt said it also has purchased a 2,500-space parking garage, an office/retail building and some office condominiums from SunCor.

"SunCor has been an outstanding, well-respected peer in our industry," Graham said. "They have done an excellent job of developing and managing a strong portfolio of quality assets. We believe these newly acquired assets will enhance and strengthen our market position."

Sunbelt Holdings is best known for its involvement in developing large master-planned communities, including the 5,400-lot Power Ranch in Gilbert and the 10,500-lot Vistancia in Peoria.

While Graham said the company's shift in focus to commercial real-estate projects is something of a departure, he noted that the company has developed a number of commercial projects in the past, including Arizona State University Research Park in Tempe and the 80-acre Phoenix Gateway Center development in Phoenix.

Pinnacle West announced in 2009 it would try to sell many of its real-estate holdings to focus on its core business, providing electricity through subsidiary Arizona Public Service Co.

SunCor Development Co. officials at the time said they would keep about $70 million in commercial real-estate holdings and sell about $400 million in housing assets, but spokesman Alan Bunnell said in late May that all SunCor property had been placed on the market for sale, including its remaining Hayden Ferry Lakeside assets.

On Friday, Bunnell said SunCor was nearing completion of its total divestiture.

"I think it's fair to say that the vast majority of the assets have been sold," he said.

As of March 31, SunCor still had $96 million in debt, compared with $175 million when the sell-off was announced in early 2009, Bunnell said.

Pinnacle West earnings have been hurt by SunCor. It has taken $334 million in annual pretax write-downs because of the company's operations: $53 million in 2008, $266 million in 2009 and $15 million in the first quarter of this year.


Sunbelt buys up SunCor holdings