Word about Hines' contract for the Downtown trophy leaked out inmid-December. According to William Olson, vice presidentwith Hines' Arizona development office, the company had made runsat the 492,116-sf One Renaissance Square at 2 N. Central Ave. andthe 473,392-sf Two Renaissance Square at 40 N. Central Ave. whenthey were separately marketed in 2005 and before that. This time,he says the offering was particularly attractive because itprovided control of both CBD buildings.

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"It's always a great opportunity when you have buildings likethis with quality tenants," Olson says. "They've seen differentownership teams and I think when they see one that's going to bethere for awhile, it helps them feel more comfortable."

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Olson tells GlobeSt.com that the 95%-leased rosters will stayfairly stable for a couple years, with 3% of the leases rolling in2008 and a 10% roll in the following year and into 2010. "Therewill be some tenant turnover. We were aware of this during the duediligence process," he adds. "But, those will create some newleasing opportunities and the ability to bring up some of thatspace to market rental rates. We think that, based on the interviewwith the tenants, they're pleased with the buildings."

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Hines is planning to upgrade the structures in two to threeyears, mainly to address issues that Olson explains are typical ofbuildings that have been around for 20 years. Hines will be theproperty and asset manager. He says interview will be held in thecoming months for the leasing assignment.

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Pauls Corp. of Denver, which was represented by New YorkCity-based Eastdil Secured's Los Angeles office, acquired the twobuildings when they were separately marketed in 2005. One Renaissance wasbought from Maguire Properties of Los Angeles, which owned thebuilding just a few months. Two Renaissance cameto Pauls via Crescent Real Estate Equities Co.

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Although Hines is active in Phoenix as a developer and investor,the Renaissance Square buy won't be followed immediately by a slewof others. Olson acknowledges that, while Hines examined about adozen different assets in Phoenix during the past four years, thecompany is taking a wait-and-see approach these days due to currentcapital market fluctuations.

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