Located at Loop 101 and Ray Road, the fully leased, two-buildingcomplex was marketed without a minimum ask by Rreef Funds of SanFrancisco. But, area sources say class A properties are bringing,on average, $200 per sf in the Chandler and South Tempesubmarkets.

"We've seen a number of things coming out both in the CamelbackCorridor and on the northwest side," says Ray Owens, managingdirector of capital markets for the Norcross, GA-based parent ofWells REIT II. "But from an overall value standpoint, we feltcomfortable where we made this investment, vis a vis the costs ofobtaining quality properties in Phoenix today."

One driving force in Wells' decision to acquire the buildings,developed in 2000 and 2003, is the surrounding infrastructure. Loop101's extension will help open up the eastern and southeasternsectors. "We've seen good population and housing growth there,"Owens says. "We like the demographic characteristics in theChandler-Tempe area."