Scottsdale Small Bay Portfolio | Hanson Capital

Scottsdale Small Bay Portfolio

17255 N 82nd St & 17250 E Hartford Dr

14441-14449 N 73rd St & 7301-7315 E Evans Rd

Scottsdale, AZ 85260

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Opportunity Summary

Hanson Capital Group is pleased to present the Scottsdale Small Bay Portfolio, a two-property, 89,533 square foot industrial complex comprising 30 bays across two premier business parks situated within the Scottsdale Airpark submarket. The portfolio is acquired at a blended basis of $248 per square foot, a significant discount to current replacement cost, providing meaningful downside protection and a compelling entry point into one of the most supply-constrained industrial submarkets in the Sun Belt.

 

The portfolio is 97% leased at acquisition, generating immediate and diversified cash flow from a broad mix of tenants across both parks. Park 1, located at 82nd Street and Hartford Drive, encompasses 49,297 square feet and is 100% leased. Park 2, located at 73rd Street and Evans Road, encompasses 40,236 square feet and is 93% leased. The near-full occupancy at acquisition allows the partnership to operate from a position of strength while executing a systematic mark-to-market leasing strategy.

 

The core investment thesis is straightforward: current in-place rents average $1.12 per square foot NNN — materially below the market rate of $1.85 per square foot NNN that comparable small bay product in the Airpark is achieving today. This 65% rent spread represents the primary value creation engine, with 62,485 square feet, approximately 70% of the portfolio, rolling within the first 30 months of ownership. The lease expiration profile provides a clear and near-term runway to capture market rents across the majority of the portfolio within the target hold period.

 

The partnership targets a two-year hold with an exit at a 5.25% cap rate, a level supported by current transaction activity in the Phoenix Metro for well-located, stabilized small bay industrial assets. The combination of a below-replacement-cost basis, near-term lease rollover, a defined value-add capital program, and a supply-constrained submarket creates a risk-adjusted return profile that is difficult to replicate in today’s market.

Minimum Investment $50,000

Key Information

  • Purchase Price: $22.25 Million
  • TI/Leasing Budget: $916,808
  • Equity Required: $11 Million
  • Close of Raise: 6/31/26
  • Zoning: I-P
  • Stabilized Cash on Cash - Institutional Class 5.86
  • Stabilized Cash on Cash - Investor Class 4.10
  • IRR: 18.25%
  • Equity Multiple: 1.39
  • Purchase Yield | Stabilized Yield: 5.20 | 6.61
  • Estimated Loan Term: 5 Years
  • Fixed | Variable Rate: Fixed
  • LTC: 60%
  • Estimated Loan Rate: 6.00%
  • Estimated Hold Period: 2 Years
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Property Details

  • Total Building Size: 89,533 SF
    • 82nd & Hartford: 49,297
    • 73rd & Evans: 40,236
  • Lot Size: 7.09 Acres
    • 82nd & Hartford: 3.59
    • 73rd & Evans: 3.5
  • Zoning: I-P
  • Market: Phoenix (Scottsdale) Arizona
  • Freeway Access: HWY 202 & HWY 101
  • Year Built:
    • 82nd & Hartford: 1998
    • 73rd & Evans: 1971
  • Construction Type:
    • 82nd & Hartford: Concrete Tilt
    • 73rd & Evans: Masonry

Business Plan

Scottsdale Small Bay Portfolio

17255 N 82nd St & 17250 E Hartford Dr, 14441-14449 N 73rd St & 7301-7315 E Evans Rd, Scottsdale AZ 85260

The business plan centers on a comprehensive physical repositioning of both parks, executed in tandem with a disciplined mark-to-market leasing program timed to coincide with the portfolio’s favorable lease expiration schedule. With 62,485 square feet expiring within 30 months, the partnership has a well-defined window to deliver upgraded product to market and capture the full $1.85 per square foot NNN rent on the majority of the portfolio — driving approximately 34% NOI growth from day one to stabilization.

Capital improvements totaling $732,000 will be deployed across both properties with an emphasis on elevating curb appeal and interior finish quality to align with tenant expectations in the Scottsdale Airpark. Exterior improvements will include full property repaints, upgraded monument and suite signage, and comprehensive asphalt seal coating and re-striping — delivering a clean, professional first impression that is consistent with the premium nature of the submarket. These upgrades are designed to be impactful, cost-efficient, and immediately visible to prospective tenants touring the market.

Interior bay upgrades will focus on delivering a modern, move-in-ready product that reduces tenant friction and shortens lease-up timelines. Each vacant and rolling bay will receive a full white box warehouse finish, new LED lighting throughout, LVT flooring in office areas, fresh interior paint, and fully renovated bathroom finishes. The result will be a turn-key suite that commands top-of-market rents while minimizing the need for additional tenant improvement allowances that erode net returns.

As leases roll, the leasing strategy will focus on replacing below-market tenants with longer-term, occupants at $1.85 per square foot NNN a rate the Airpark market is actively supporting and in many cases exceeding. Several existing leases contain renewal options at below-market rates; these will either be managed to capture a natural rent step-up at renewal or marketed as additional upside to the next buyer at exit, embedded within a compressed cap rate environment. This optionality enhances the portfolio’s exit story regardless of whether those tenants exercise their options.

At the end of the two-year business plan, the portfolio will be presented to market as a fully renovated, stabilized small bay industrial portfolio in one of the nation’s most recognized and supply-constrained business park submarkets. An exit at a 5.25% capitalization rate on a stabilized NOI representing approximately 34% growth over the in-place figure delivers strong risk-adjusted returns to the partnership while leaving meaningful upside on the table for the next ownership group.

Market Analysis

Northeast Valley is Phoenix's strongest performing sector

According to Cushman & Wakefields Q4 2025 market beat, the Northeast Valley across all size ranges boasts the valley’s tightest vacancy rates. Small bay industrial supply within the Scottsdale Airpark is severely constrained and has been for years. The submarket is largely built out, with land scarcity, entitlement barriers, and high land costs making new small bay development economically prohibitive. This structural supply constraint has created a persistent imbalance between tenant demand — which remains strong and consistent — and available inventory, underpinning rent growth and near-zero vacancy for quality small bay product. New competing supply is not expected to materially impact the submarket during the investment period.

 

Location

Scottsdale Small Bay Portfolio

17255 N 82nd St & 17250 E Hartford Dr, 14441-14449 N 73rd St & 7301-7315 E Evans Rd, Scottsdale AZ 85260

Why Scottsdale Small Bay Makes Sense

  • Clear Upside: Significant MTM and NOI Growth
  • Below Replacement Cost: Irreplaceable basis of $248/SF
  • Infill Location: Strong Scottsdale Airpark location
  • Attractive Bay Sizes: Average bay size ~2,900 SF

Returns Overview

Underwriting Assumptions

  • Replacement Rental Rate: $1.85/SF NNN
  • Vacancy Timing Upon Lease Expiration: 8 Months
  • Exit Cap Rate: 5.25
  • Sale Price: $350/SF
  • Deal Time Horizon: 2 Year

Partnership Structure

Distributions and Fees

  • Monthly distributions of operating profits
  • 2.0% acquisition fee
  • 1% asset management fee on Equity Raised
  • 1% disposition fee

Institutional Class

  • Preferred Return of 8% on all cash flow until 8% annualized return is realized.
  • 100% of distributions following the satisfaction of the 8% preferred return will be paid to the General Partner as a “Catch Up” until the General Partner has received an amount equal 2.67% of the aggregate distributions
  • Equity partner with 70/30 split of profits beyond satisfying the 8% Preferred Return and General Partner Catch Up. General Partner will receive a 30% carried interest in the net profits, with the remaining 70% of net profits to be distributed to the Limited Partners
  • Waterfall structure as follows:
  • Investor Preferred Return – 8%
  • General Partner Catch up – 2.67%
  • Pre 13% IRR Hurdle Investor/General Partner Distribution Ratio – 70/30 split
  • Post 13% IRR hurdle Investor/General Partner Distribution Ratio – 60/40 split

Investor Class

  • Equity partner with 70/30 split of profits. General Partner will receive a 30% carried interest in the net profits, with the remaining 70% of net profits to be distributed to the Limited Partners
  • Waterfall structure as follows:
  • Pre 13% IRR Hurdle Investor/General Partner Distribution Ratio – 70/30 split
  • Post 13% IRR hurdle Investor/General Partner Distribution Ratio – 60/40 split

Company Overview

Scottsdale Small Bay Portfolio

17255 N 82nd St & 17250 E Hartford Dr, 14441-14449 N 73rd St & 7301-7315 E Evans Rd, Scottsdale AZ 85260

At Hanson Capital Group, experience is not just a metric—it’s our foundation. Boasting over 100 years of combined expertise in real estate, we’ve cultivated a reputation for excellence and strategic insight in the market. Our formidable investments, nearing $350,000,000 under management, are a testament to our sustained success. Driving our vision forward is a harmonized team of executives and directors. CEO Chris Hanson, COO Zach Price, Managing Director of Acquisitions Chris Pike, and Managing Director of Asset Management Jim Tainter lead the charge. Together, they craft the trajectory for Hanson Capital Group, ensuring we remain at the forefront of the real estate industry.

Established in 2008, Hanson Capital Group embarked on its mission to become a trusted auction bidding service provider and create a lasting enterprise focused on creating wealth for ourselves and our partners. Aligning with prominent institutions, our dedication and energy quickly became evident, resulting in the acquisition of over 1,500 single-family homes out of foreclosure within an impressive six-year span. However, our sights were set higher. Identifying a unique opportunity to elevate our bidding pursuits, Hanson Capital, LLC was established in 2010 as a state-licensed mortgage bank. Today, Hanson Capital thrives as a leading hard money and bridge debt lender, and, to date, has overseen transactions exceeding $500 million, while consistently maintaining an equity portfolio averaging $40 million.

While our initial investments were rooted in real estate backed lending, in 2010 we began our pursuit of direct investment in value-add multifamily assets. After nearly a decade of that value-add multifamily strategy, and after buying and selling a few thousand apartment doors, our focus shifted in 2018 towards industrial real estate, which continues to be the focus today.

We are now deeply entrenched in industrial real estate within the so-called “Sun Belt”, with a notable presence in strategic areas like California, Arizona, and Texas. The result of this commitment is roughly $350,000,000 in assets under management and over 1.6 million square feet.

Our process is invaluable to our success. All investment decisions are made by our investment committee in accordance with our Investment Policy Statement (IPS). Strategically crafted, the IPS emphasizes our central mission: capitalizing on inefficiencies in real estate to provide sustainable returns through proven and disciplined investment and management strategies. Every facet of the IPS has been intricately designed to demystify our methodologies, underscoring our commitment to transparency, accountability, and the responsible management of entrusted capital. The IPS also guides us in making informed, consistent decisions, helping to mitigate risks, and optimize returns, while ensuring that our actions align with our long-term investment objectives.

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Chris Hanson

Founder

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