Larry Jackel, a principal with Fenway Properties, says he alwaysliked the three-building, class B asset at 5333 N. 7th St. and hadbeen keeping an eye on it. He says the investment group stepped inand made an offer after the asset fell out of escrow a coupletimes.

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Cushman & Wakefield of Arizona Inc. executive directorChristopher Toci and associate director Ted Harrison brokered thetransaction between both parties, which Jackel says went smoothly."KBS is a good owner and was fantastic to work with," he says."They're a class act and quality organization."

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Jackel says Paragon Plaza is somewhat different from FenwayProperties' usual target asset. "Most of our properties have asignificant value-add component," he tells GlobeSt.com. "They'llhave a lot of capital investment needed for outside work or need alot of interior improvement." But, he says Paragon Plaza is inpretty good shape, with not many upgrades required except for somenew HVAC equipment and small interior and exterior changes.

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"This is really more of a time play," Jackel explains. "This was82% leased when we closed. With replacement costs in the $250 persf range, we thought this would make a good value play."

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Jackel says the play also was attractive to several lenders.MidFirst Bank of Omaha provided debt for the deal. He adds thatMidFirst Bank was "absolutely wonderful to deal with."

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Paragon Plaza, built in 1984, was one of two remainingproperties in the five-property portfolio that KBS acquired fromScottsdale, AZ-based Denali National Trust Inc. in 1998. The100,670-sf Scottsdale Airpark Corporate Center at 15020-150 N.Hayden Rd. is slated to change hands in October.

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Colliers International has the leasing assignment for ParagonPlaza and the 173,388-sf Camelwest Plaza at 1951 and 2001 W.Camelback Rd., which Fenway bought inmid-August. The buyer, which entered the market in 2005, now controlsone million sf in the metro and is looking for more value-addoffice and industrial product. Jackel says he has no set amount toacquire although he thinks now is a great time to be buying inPhoenix.

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"We're not merchant builders, but we're a true value-addcompany," Jackel says, adding that the assets are slated for athree- to five-year hold. "We do the work, fill up the property,treat the brokers and tenants right, then turn around and sell theproperty. That's our niche."

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