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PHOENIX-The Internal Revenue Service will be moving its regional office into 107,849 sf of class A office space in the CBD. The 10-year lease has a $25-million payout.

The IRS’ move-in will take place in late 2008, following an extensive finish-out of the 20-story tower at 4041 N. Central Plaza.

According to Zaya Younan, chairman and CEO of Los Angeles-based Younan Properties Inc., the deal required shifting around existing tenants and a buy-out of Denver-based Qwest Corp.’s lease in order to get a large enough contiguous block for the IRS. The agency’s office currently is located at 210 E. Earll Dr., less than a mile to the south of its just-leased location.

Younan says Qwest, in the midst of a Downtown consolidation, had two years remaining on its lease at 4041 N. Central Plaza. In closing the deal for the federal agency, the 400,000-sf building’s occupancy rises to 96%.

The lease has been signed with the office building on the verge of being sold. Although Younan can’t discuss the sale as yet, he says the asset should change hands within 30 days. “We signed the lease with the IRS before putting the building on the market,” he explains.

Younan says the GSA selected 4041 N. Central Plaza for the new IRS location following the usual extensive bid process required for federal leases. “Very few buildings offered what they were looking for, which included contiguous space,” Younan says. “We were fortunate and glad they selected ours.”

Transwestern Phoenix senior vice presidents Jim Achen Jr. and William Zurek along with associate vice president Vince Femiano represented Younan Properties in the lease transaction. Devpal Gupta, vice president for Chicago-based UGL Equis, represented the GSA for the lease negotiations.

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