Larry Jackel, a principal with Fenway Properties, says he always liked the three-building, class B asset at 5333 N. 7th St. and had been keeping an eye on it. He says the investment group stepped in and made an offer after the asset fell out of escrow a couple times.

Cushman & Wakefield of Arizona Inc. executive director Christopher Toci and associate director Ted Harrison brokered the transaction 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."

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

"This is really more of a time play," Jackel explains. "This was 82% leased when we closed. With replacement costs in the $250 per sf range, we thought this would make a good value play."

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

Paragon Plaza, built in 1984, was one of two remaining properties in the five-property portfolio that KBS acquired from Scottsdale, AZ-based Denali National Trust Inc. in 1998. The 100,670-sf Scottsdale Airpark Corporate Center at 15020-150 N. Hayden Rd. is slated to change hands in October.

Colliers International has the leasing assignment for Paragon Plaza and the 173,388-sf Camelwest Plaza at 1951 and 2001 W. Camelback Rd., which Fenway bought in mid-August. The buyer, which entered the market in 2005, now controls one million sf in the metro and is looking for more value-add office and industrial product. Jackel says he has no set amount to acquire although he thinks now is a great time to be buying in Phoenix.

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