The downtown Austin building is fully leased to tech giant Google until 2038. Eastdil Secured served as the exclusive advisor on the transaction.

The purchase price, according to a Cousins presentation on the deal, is “well below replacement cost.” Current total rents in the area averages $56.22 per square foot, according to CommercialEdge data, with net rents averaging $40.12 per square foot. Average occupancy in the area is 81.2 percent.

Trammell Crow Co. completed the 804,000-square-foot, 35-story property in 2022 on a site that had been a vacant lot throughout the 2010s.

The building, which is certified LEED Platinum, includes 8,100 square feet of retail, a multi-level parking structure with 1,365 spaces, a fitness center and views of Lady Bird Lake from landscaped terraces. It is near the Second Street entertainment district in downtown Austin.

The nickname Sail Tower speaks to the sail-like design by the renowned Pelli Clarke & Partners. Other well-known office designs by the firm include Salesforce Tower in San Francisco, One Congress at Bulfinch Crossing in Boston and Petronas Towers in Kuala Lumpur, Malaysia.

Atlanta-based Cousins is no stranger to the Austin market, with an existing 1.7 million-square-foot office portfolio downtown near the Sail Tower. The REIT is also the largest owner of office space in the Domain district in North Austin, an interest that includes 2.5 million square feet in 11 buildings. Other Cousins tenants in the market include Adobe, Amazon, Expedia and Fidelity.

READ ALSO: When Office Meets Hospitality: A Love Story

Earlier this year, IBM leased 320,000 square feet at Domain 12. Big Blue will assume the lease for Meta Platforms on Jan. 1, 2026. The agreement was also extended from 2031 through 2040.

“We view this lease as a strong signal that the technology sector will continue to be highly invested in the Austin market, and particularly the Domain, over the long term,” Richard Hickson, Cousins’ executive vice president of operations said during the company’s third quarter earnings call in October.

“We know of a number of other technology companies that we already do business with, and some others that we don’t currently do business with, that are searching in the Austin market specifically,” Hickson said. “So, we feel good about the amount of activity that’s starting to come to fruition.”

Austin vacancies high, development still ongoing

For any tech companies who want to be in post-pandemic Austin, there is a large selection of office space on the market, which is characterized by sluggish demand and reduced office utilization, as well as continued development.

As a result, Austin office vacancy now stands at 27.7 percent, tied with San Francisco for the highest U.S. rate, and up 710 basis points from a year ago, according to CommercialEdge data.

Currently 3.5 million square feet of office is in the development pipeline, or 3.7 percent of its existing stock. On a percentage-of-stock basis, that is second-highest in the nation, CommercialEdge noted. Austin’s office footprint would grow by 12.1 percent, if current and planned projects all come to fruition.

Investors have backed away from the Austin office market lately, though some are in town for the discounts. The market, which led the nation in sale prices in September, saw a sharp decline from $379 per square foot that month to $287 per square foot by November. The drop reflects an increase in properties being sold at discounted prices, CommercialEdge reported.

The post Austin Tower Commands $522M appeared first on Commercial Property Executive.

JLL also secured the acquisition financing for AEW from Manulife Real Estate Finance, in the form of what the firm described as low-leverage, fixed-rate financing. The transaction’s dollar value was not disclosed.

The seller was a partnership led by Barshop & Oles Co., a privately owned, Austin-based development and management firm that specializes in grocery-anchored neighborhood and community shopping centers.

Bar W Marketplace is at 19348 Ronald Reagan Blvd., at the southeast corner of Ronald Reagan Boulevard and SH-29 in Williamson County. The location reportedly benefits from easy access to major thoroughfares and proximity to multiple residential communities and ongoing developments.

READ ALSO: How Dining Trends Are Reshaping Shopping Centers

The retail center was built between 2022 and 2024 and is fully leased. It features five ground-leased pads and a mix of tenants that includes Chase Bank, Wells Fargo, Whataburger, Chili’s, Torchy’s Tacos and 7Brew Coffee.

The JLL Capital Markets Investment and Sales Advisory team representing the seller was led by Senior Managing Directors Barry Brown and Chris Gerard and Director Erin Lazarus. The JLL Debt Advisory team was led by Senior Managing Director Doug Opalka and Director Jackson Finch.

Shortage of retail space supply

The Austin retail space market is seeing “a significant slowdown in net absorption due to limited new space and a tight vacancy rate of 3.4 percent, despite healthy leasing demand,” according to a third-quarter report from local firm Partners Real Estate.

Of the 1.1 million square feet of net absorption so far this year, Burlington and The Picklr have been prominent tenants. The latter is a nationwide franchiser of pickleball clubs that currently has about 10 locations in Texas.

Partners Real Estate reports that both new deliveries and the development pipeline are slowing down, causing predictions of modest rent increases from tightening supply.

Just a few weeks ago, Partners Capital sold San Marcos Place, a 73,105-square-foot retail center in San Marcos, Texas, midway between Austin and San Antonio, to an undisclosed local buyer. SRS Real Estate Partners Senior VP Cathy Nabours and VP Kyle Shaffer represented the seller.

The post AEW Capital Buys Austin-Area Retail Center appeared first on Commercial Property Executive.

The city of Austin, Texas, has acquired One and Two Barton Skyway, two office buildings totaling about 386,000 square feet in Southwest Austin. Brandywine Realty Trust sold the assets for $107.6 million, or $275 per square foot. The buyer expects to spend an additional $3 million on renovations and $9 million on design services.

The buildings will serve as consolidated public safety headquarters for Austin Police, Austin Fire and the Austin-Travis County Emergency Medical Services, currently scattered across the city.

This new location will generate significant cost savings and increased efficiencies, said Mayor Kirk Watson in prepared remarks. Building a new comparable facility would have cost approximately $234 million, or $600 per square foot, more than double the price of buying the existing assets, according to the city.

READ ALSO: Austin Office Market Commands High Prices

Located at 1501 and 1601 S. MoPac Expressway and completed in 1999 and 2000, both Class A buildings stand four stories tall and encompass roughly 195,000 square feet each. Also, both have 50,000-square-foot floorplates. The campus the buildings are in, located near Zilker Park, includes two five-level parking garages, each with more than 780 parking spaces.

The Barton Skyway office park, situated on 35 acres, comprises four buildings. Brandywine still owns Four Barton Skyway, which is currently 94 percent leased.

Brandywine’s strategy

The sale of the two buildings is consistent with the REIT’s capital recycling and portfolio management objectives, Jerry Sweeney, president & CEO, stated in prepared remarks.

Sweeney also noted the REIT’s commitment to Austin. He cited the company’s development of 405 Colorado, a 25-story Class A office building, and Uptown ATX, a 66-acre master-planned development that’s a cornerstone of Austin’s emerging second downtown. Brandywine completed Uptown ATX’s One Uptown, a 381,739-square-foot, 14-story, Class A office building, in January. The mixed-use campus will have 3.2 million square feet of office, retail and residential space upon buildout.

Closer to home, Brandywine recently signed a 119,000-square-foot lease at 250 Radnor St., a life science and office building in Radnor, Pa., a Philadelphia suburb. That 168,000-square-foot building is now fully leased.

Brandywine’s portfolio, which is concentrated in the Philadelphia and Austin markets, comprised 147 properties and 21.1 million square feet as of Sept. 30.

The post Brandywine Sells 2 in Austin for $108M appeared first on Commercial Property Executive.

Equity Commonwealth has sold two office assets totaling 616,000 square feet for $64.5 million in Austin, Texas.

The REIT agreed to the disposition of Bridgepoint Square, a five-building, 440,000-square-foot campus, and the Capitol Tower, a 176,000-square-foot office property. Marbella Interests acquired Bridgepoint Square, according to Travis County public records. JLL was tapped to arrange this sale on behalf of EQC.

The company was also looking to sell 1250 H St. NW, a 196,490-square-foot office building in Washington, D.C., according to third-quarter financial reports. Equity Commonwealth recognized a $50.2 million combined loss on asset impairment related to the office trio.

Capitol Tower came online in 1984 and EQT purchased the property for $49 million in 2012. Pomeroy Holdings sold the asset, CommercialEdge data reveals. Rising 20 stories, the building encompasses 25,805-square-foot floorplates. The tower is LEED Silver and Energy Star certified.

READ ALSO: Austin Office Market Commands High Prices

An EQC financial report shows that Capital Tower was 69.4 percent leased as of Sept. 30. The tenant directory included Prosperity Bank, as well as VMware Technology and BCW, among others.

Carrying the address 206 E. Ninth St., the high-rise is in Austin’s central business district, within walking distance of the Texas Capitol. Several parks, quick-service restaurants and museums are proximate to the building.

The sale of Bridgepoint Square

Bridgepoint Square’s five buildings debuted between the late 1980’s and mid-to-late 1990’s. EQC acquired the campus in 1997 for $78 million in a portfolio deal, according to CommercialEdge data. Financial Industries Corp. sold the property.

Since 2015, EQC has invested more than $13.5 million in capital improvements at the office campus. Prior to the trade, Building 5 was undergoing a renovation process which included upgrades to the lobby and common areas.

The buildings rise either four or five stories high, with floorplates averaging from 16,000 to 22,000 square feet. Amenities comprise a cafe, a gym, a volleyball court and three parking structures. Bridgepoint Square was 52.5 percent leased as of Sept. 30, EQT data shows. The tenant roster includes New York Life Insurance Co. and Burns & McDonnell, among others.

Located on 27.7 acres at 6200 and 6300 Bridge Point Parkway, the campus is about 10 miles northwest of downtown Austin. The Pennybacker Bridge, Lake Austin and Texas State Highway 360 are less than 1 mile away.  

Austin’s pricy office assets

Despite an office vacancy rate of 27.8 percent as of September, Greater Austin office assets traded on average for $379 per square foot this year, sporting one of the nation’s highest price tags.

The total office investment volume in metro Austin reached $787 million during the first 10 months of the year, according to CommercialEdge. Volume-wise, the Metroplex fared better with investors, as $1.1 billion in office assets traded during the period.

Earlier this year, Endeavor Real Estate Group used its discretionary fund to acquire Plaza on the Lake, a 120,798-square-foot office asset in Austin. IPERS and Clarion Partners sold the property following a $5 million capital improvement plan.

The post EQC Sells 2 Office Assets in Austin for $65M appeared first on Commercial Property Executive.

Alliance Industrial Co. has sold the 1.4 million-square-foot 35 Kyle Logistics Park in Kyle, Texas, to MDH Partners. The property is 100 percent leased to electric vehicle maker Tesla, which uses it for storage and light assembly in support of its gigafactory in Austin.

Completed in 2023 as a spec development but quickly leased by Tesla, the property consists of five buildings ranging from 140,300 to about 474,400 square feet. The facilities feature 36- to 40-foot clear heights, ESFR sprinkler systems and parking.

JLL Capital Markets represented the seller in the deal. The team included Industrial Group Co-Lead & Senior Managing Director Trent Agnew, along with Senior Directors Witt Westbrook, Kyle Mueller, Charlie Strauss and Tom Weber. Considering the location and the ironclad quality of its tenant, the property attracted a lot of investor interest, according to Agnew.

READ ALSO: Will CRE Market Conditions Improve?

“Interest level was strong from a mix of institutional investors due to the construction quality and tenancy primarily,” Agnew, Industrial Group co-lead and senior managing director told Commercial Property Executive.

“Austin continues to be a preferred market due to the long-term population growth projected, as well as the anticipated multiplier effect relative to tenant demand as a result of the Tesla gigafactory expansion—Samsung, Applied Materials and others,” Agnew said.

The campus takes its name from Interstate 35, which connects Austin with San Antonio, and has been a focus of commercial and residential boom in recent years. Under an agreement with Hays County, the developer, Alliance, received property tax reductions totaling more than $3 million, according to The Real Deal.

The town of Kyle has nearly doubled in size over the past decade, according to Census Bureau data. Though part of metro Austin, it is for now considered a relatively more affordable suburb of that city.

Alliance Industrial Co. has invested in 20 projects since its inception more than three years ago, totaling nearly 6.6 million square feet, and controls over 5 million square feet for future investment. The company is headquartered in Houston.

Atlanta-based MDH Partners manages funds targeting U.S. industrial real estate on behalf of institutional investors. The company has led or participated in more than $6 billion (90 million square feet) of acquisitions, developments and asset management as an advisor and investor.

Tesla continues Texas expansion

Tesla’s headquarters are at the company’s gigafactory in Austin, where it moved in 2021 from its former location in Alameda County, Calif., with the company maintaining—and even increasing—its operations in California. The Austin site employs 20,000 workers, making it the second-largest employer in Travis County, where the company builds Model Y SUVs and the Cybertruck at a facility that spans more than 10 million square feet.

Besides producing vehicles at the gigafactory, Tesla makes battery packs and cells for its batteries, and oversees plastic injection molding and stamping press lines, alongside other activities associated with its EV lines with an overarching goal of being more vertically integrated.

The gigafactory is hardly the auto tech giant’s only facility in the Austin area, where it occupies at least 4.5 million square feet—including the leases at 35 Kyle Logistics Park and other facilities—a number that is growing. Near Corpus Christi, Texas, Tesla started work on a lithium refining plant, and it occupies 440,000 square feet of San Antonio warehouse space.

The post MDH Acquires Tesla-Leased Logistics Park Near Austin appeared first on Commercial Property Executive.

Sabey Data Centers has completed the first building of SDC Austin, its new data center campus in Round Rock, Texas. The 430,000-square-foot facility broke ground in July 2022.

SDC Austin is poised to maximize data center space while minimizing the construction footprint, ensuring scalability for deployments of all sizes.

Upon full build-out, the facility will provide up to 84 MW of critical power capacity. The project is also engineered to accommodate liquid cooling and high-density computing environments, supporting up to 200 kW per cabinet.

READ ALSO: Meeting the Insatiable Demand for Data Centers

The completion comes on the heels of the developer’s announcement that The Texas Advanced Computing Center chose Sabey Data Centers as its colocation partner for the Horizon supercomputer, which will be deployed in Round Rock. Horizon is set to be the largest academic supercomputer dedicated to open-scientific research in the National Science Foundation’s portfolio.

Part of a larger campus

The two-building campus is rising on the former site of a Sears call center. The other facility will measure about 105,000 square feet, according to Community Impact.

SDC Austin occupies 40 acres at 1300 Louis Henna Blvd., less than 4 miles from downtown Round Rock. Downtown Austin is 18 miles away, while the Austin-Bergstrom International Airport is some 23 miles southwest.

In February 2022, the Round Rock City Council approved an economic development agreement that grants tax incentives to the developer. Under the terms of the agreement, Sabey is required to invest at least $185 million in property enhancements and $5 million in new equipment and business personal property. The company must also create a minimum of 20 primary jobs within a five-year period.

North America saw a 10 percent increase in supply in primary markets in the first half of this year, accounting for about 515 MW, according to a CBRE report. The under-construction pipeline was up by 69 percent year-over-year. Additionally, Austin and San Antonio’s combined underway projects more than quadrupled from a year ago to 463.5 MW.

The post Sabey Completes 1st Building at Austin Data Center Campus appeared first on Commercial Property Executive.

Waterstone will feature 32-foot to 36-foot clear heights, 232 dock-high doors, 10 drive-in doors and 994 parking stalls for its four buildings. The property, located on I-35, will offer connectivity to both Austin, Texas, and San Antonio. Waterstone will also be about 30 miles from Tesla’s Gigafactory—whose presence has increased industrial demand across the Greater Austin region—and about 25 miles from Austin–Bergstrom International Airport.

Kyle’s population grew from 28,000 people in 2010 to nearly 45,700 residents in 2020, as thus becoming one of Texas’ fastest-growing cities in recent years, according to Census Bureau data. Though not far from San Antonio, the town is closer to Austin, and part of metro Austin.

READ ALSO: E-Commerce Growth Revives Industrial Market

Waterstone is positioned in the market to provide opportunity to the growing south I-35 corridor in the Greater Kyle/San Marcos region, according to Cole Kennedy, a development and acquisitions associate at Lincoln Property Co., who added that the property can serve both Austin and San Antonio.

As a diversified CRE company, Lincoln’s management and leasing portfolio on behalf of institutional clients totals more than 510 million square feet. The company has completed over 150 million square feet of development since its inception in 1965 and another $20 billion is currently under construction or in the pipeline.

Affinius Capital, formerly known as USAA Real Estate and Square Mile Capital Management, has about $64 billion in assets under management in North America and Europe.

“Ongoing demand for industrial properties continues to outpace supply across most markets in the U.S., creating a compelling opportunity for strategic development,” Affinius Capital Managing Director Tom Burns told Commercial Property Executive.

“Despite the broader banking sector’s pullback from development lending, this segment remains one of our most active areas, and we anticipate continued robust engagement in the industrial market,” Burns said.  

An active CRE lender, Bank OZK operates in nine states and has about $36.8 billion in total assets.

Austin industrial inventory expands, vacancies up

Greater Austin remains an overall growth market for industrial, with more than 4.4 million square feet of speculative and build-to-suit product delivering during the third quarter of 2024, representing a high for quarterly deliveries, according to JLL.

New supply has put upward pressure on Austin industrial vacancy rates, which surpassed 14 percent in mid-2024, compared to around 3 percent as recently as 2021, JLL reported. That year, pandemic-era demand crested as companies struggled with supply chains and reshoring began in earnest.

Demand is still strong, however. Year-to-date absorption nearly doubled from the first half of the year to the first three quarters, spurred by strong net occupancy gains in the third quarter, JLL noted.

The post Lincoln Property, Goldman Sachs Secure Financing for Austin Project appeared first on Commercial Property Executive.

Olive Co. has started work on McCarty Park, an industrial campus taking shape on nearly 100 acres in San Marcos, Texas. At full build-out, the complex will comprise some 768,400 square feet across six facilities.

The spec project’s first phase, involving the development of three rear-load buildings totaling some 343,700 square feet, is slated for completion by the second half of 2025.

Phase One will occupy more than 48.6 acres, roughly half of the park. Its three buildings will range from 94,600 square feet to 127,400 square feet and feature 28- to 32-foot clear heights.

READ ALSO: E-Commerce Growth Revives Industrial Market

The property’s truck courts will be as much as 170 feet deep. There will be parking for 496 autos, as well as designated trailer parking. CBRE Senior Vice President Darryl Dadon and Associate Olivia Reed are in charge of marketing and leasing the project.

Carrying the address 1600 E. McCarty Lane, the site is in the Interstate 35 Corridor between San Antonio and Austin, Texas, with proximity to both Austin-Bergstrom and San Antonio International Airports. The location has direct access to both I-35 and Highway 123.

McCarty Park is Olive’s first development in Central Texas, as the firm has confidence of the area’s continuous growth.

And the Oklahoma City-based company is hardly the only industrial real estate player interested in San Marcos. Recently, Triten Real Estate Partners acquired Central Texas Logistics Center, a seven-building, 485,885-square-foot industrial portfolio which represented its entry into the market as well.

Industrial vacancy rate down over the quarter

Greater Austin had nearly 10 million square feet of industrial space under construction in the third quarter of this year, according to a recent CBRE report. More than 99 percent of product was speculative distribution space.

Meanwhile, the metro witnessed nearly 1.6 million square feet of total net industrial absorption, the report shows, bringing market vacancy down 230 basis points quarter-over-quarter to 13.6 percent. Tesla occupying 430,000 square feet and Seoyon E-Hwa with 212,000 square feet were the main absorption drivers.

Tesla and Samsung have invested heavily in the metro, CBRE notes, spurring interest in the region by multinational and domestic automotive and semiconductor operations, especially Tesla suppliers HBPO, Simwon America Corp. and U.S. Farathane. Samsung suppliers LS Electric Co. and Hanyang Eng USA have also expanded in the region.

The post Olive Breaks Ground on Austin Industrial Park appeared first on Commercial Property Executive.

IDI Logistics has completed three industrial buildings in Round Rock, Texas. Totaling 310,689 square feet, they represent the first phase of Sunrise Commerce Center. The property spans 37 acres and is planned to encompass 465,660 square feet at full build-out. The developer broke ground last spring.

Partners on the project include general contractor Adolfson & Peterson Construction, 5G Studio Collaborative as architecture firm and civil engineer Pacheco Koch. Stream Realty Partners are handling the leasing efforts. AP’s role also included tenant finishes.

READ ALSO: Top 5 Markets for Industrial Deliveries

The three warehouses have rear load capabilities and include build-to-suit office space. The 175,170-square-foot Building A has 36-foot clear heights, 43 dock-high loading doors and two drive-in doors, as well as 230 car parking spaces and 62 trailer stalls.

Building B spans 59,274 square feet and has 18 dock loading doors and 93 vehicle parking spots, while the 76,247-square-foot Building C has 24 dock doors and 121 parking spaces. Both facilities have 32-foot clear heights.

Located at 2380 Oakmont Road, the campus is close to Interstate 35 and 4 miles from downtown Round Rock. Downtown Austin is within 23 miles, while the Austin-Bergstrom International Airport is 28 miles south.

The development’s second phase will include a 59,274-square-foot facility with 106 car parking spaces and a 95,693-square-foot building with 229 vehicle spots and 30 trailer stalls. Both warehouses will have 32-foot clear heights.

Stream Realty Partners Executive Managing Director & Partner Will Nichols, along with Managing Director & Partner Sam Owen are handling all leasing efforts.

Austin’s industrial supply surge leads to rise in vacancy

In the second quarter of this year, about 1.7 million square feet of industrial space came online across the metro, according to a Cushman & Wakefield report. A total of 6.2 million square feet were delivered in the first half of the year, contributing to a 320-basis-point year-over-year increase in vacancy.

In August, a joint venture between Ryan Cos. and DWS Group announced plans for Mustang Crossing, 1.2 million-square-foot, six-building industrial campus in Manor, Texas. The first phase of the project will include four facilities that are expected to break ground this December and come online by March 2026.

A few months earlier, Titan Development received city approvals for the development of the 1.3 million-square-foot Leander 183 Commerce Center. The campus will be constructed on 115 acres in Leander, Texas, and is scheduled for completion in 2036.

The post IDI Logistics Completes 310 KSF Project Near Austin appeared first on Commercial Property Executive.

Project partners included Greystar, Whitman Peterson and Marketplace Real Estate Group as equity partners, together with Comerica and Veritex, which provided construction financing. Method was the architectural firm. Burton served as general contractor and Westwood was the civil engineering firm.

Located at 6807 Elroy Road, the business park is just off Highway 130 and about 5 miles from Austin-Bergstrom International Airport and Tesla’s 2,500-acre Gigafactory. ATX 130 also has access to Interstate 35 and Highway 71.

The property could house various industrial users, including third-party logistics providers, R&D users, e-commerce distribution and consumer goods warehousing. Aquila Commercial is handling leasing for ATX 130.

Two buildings, fully leased

Two of the park’s buildings have already been fully leased. Jackson-Shaw expects the remaining two facilities to find tenants soon due to 67-acre complex’s strategic location in the rapidly growing Southeast Austin submarket.

Ferguson, a distributor of plumbing supplies, PVF, waterworks and fire and fabrication products, has leased the entire Building 3, a 207,280-square-foot facility with a 32-foot clear height and 45 dock doors.

Hotline Delivery, a third-party logistics company seeking closer proximity to the airport, has leased the entire 120,440-square-foot Building 1.

Building 2 has 80,365 square feet, while Building 4 measures 194,385 square feet. Both feature move-in ready spec office space to accommodate tenants’ immediate needs.

Features at all four facilities include ESFR fire protection systems, ample parking and trailer storage.

READ ALSO: Top 5 Markets for Industrial Deliveries

Miles Terry, vice president of development at Jackson-Shaw, said there is interest from users that would take the remaining full buildings and some that would take only a portion of each.

“Both buildings are designed to be flexible, with four entries to accommodate multiple tenants of various sizes or a single tenant,” Terry told Commercial Property Executive.

More Jackson-Shaw activity in Texas

Earlier this month, Jackson-Shaw broke ground on GreensPORT Logistics Park, a two-building, 535,478-square-foot industrial campus in Houston it expects to complete by the third quarter of 2025. The property has access to Interstate 10 and is about 14 miles from downtown Houston and 25 miles from George Bush International Airport.

Another Jackson-Shaw development in the Lone Star State is Post Oak Logistics Park, a 536,992-square-foot, two-building industrial project in Houston. In April, Festival Trading Co. leased an entire 168,893-square-foot facility at the 43-acre campus.

And, at the beginning of the year, Jackson-Shaw partnered with Compatriot Capital to develop Lakeview Business District, a more than 1.8 million-square-foot industrial campus in the Dallas-Fort Worth submarket of Rowlett, Texas. The complex will have five buildings ranging between 88,000 and 417,000 square feet.

The post Jackson-Shaw Completes Austin Business Park appeared first on Commercial Property Executive.

The Malin has opened a 12,000-square-foot flex office location in Austin, Texas. The company’s new coworking space is at 1515 E. Cesar Chavez St. Pennybacker Capital is the developer and owner of the recently completed 71,623-square-foot office building, according to CommercialEdge information.

This is The Malin’s sixth location in the country and its first in Texas. The new space will include 24 dedicated desks, 10 private offices, four meeting rooms, two libraries and 12 phone booths. Membership access for the location includes three levels and day passes.

The Malin will also provide multiple services for its members, focused on ensuring a creative work environment, such as catered lunch, baked goods, coffee orders, fresh floral arrangements and access to an Executive Assistant program and concierge services.

Completed last year, the three-story, Class A creative office property includes 9,196 square feet of retail space and 187 vehicle parking spots. The building features floor-to-ceiling glass, a three-story green wall, private terraces, showers and bike storage spaces. In 2021, Pennybacker Capital secured a $28.2 million construction loan provided by First United Bank and Trust Co., CommercialEdge shows.

The Malin expanding its footprint

The building is close to downtown Austin, which allows access to multiple dining and retail options, as well as to bus stations and to Interstate 35. Austin-Bergstrom International Airport is 10 miles away.

In July, The Malin expanded its footprint with a 10,000-square-foot space in Savannah, Ga., that will open in 2025. The company partnered with Ann Street Lofts and the deal marked its first single-use building in its portfolio.

In March, the company announced its plans to open a 20,000-square-foot location dubbed The Malin NoMad, occupying the entire fifth floor of 387 Park Ave. S. in Manhattan, its fourth coworking space in New York City. The new coworking space will be available this month at TF Cornerstone’s 12-story, 232,000-square-foot property.

The post The Malin Enters Austin With 12 KSF Coworking Space appeared first on Commercial Property Executive.

Triten Real Estate Partners has acquired Central Texas Logistics Center, a seven-building, 485,885-square-foot industrial portfolio in San Marcos, Texas, within metro Austin. Peak Rock Capital previously owned the properties, CommercialEdge data shows.

This purchase marked Triten’s entry into the Austin submarket and its largest industrial acquisition to date.

Delivered between 2008 and 2022, the buildings feature cross-dock, rear- and front-load configurations, as well as 24-foot clear heights and an average suite size of 27,595 square feet. The industrial park is 100 percent-leased to 15 national and regional tenants, including Lowe’s Pro Supply, Builders Alliance, Goodman and West Shore Home, among others.

READ ALSO: CRE Prices are Stabilizing

Central Texas Logistics Center is at 1551 and 1600 Clovis R. Barker Road, within the Texas Innovation Corridor. The 46-acre portfolio is roughly 36 miles southwest of downtown Austin and some 47 miles northeast of downtown San Antonio, as well as about 2 miles from Interstate 35.

Since 2021, Triten has acquired or developed nearly 50 supply chain properties encompassing about 500 acres, with an aggregated market value of more than $450 million. Additionally, the firm purchased and built north of 3 million square feet of traditional industrial space.

Before Triten’s entry into the Austin submarket this year, the company took steps to expand its industrial and IOS portfolio the year prior with assets throughout Dallas, Philadelphia, Atlanta and Washington, D.C., according to prepared remarks by Will Hedges, partner at Triten Real Estate.

Metro Austin’s industrial investment treads water

Metro Austin investors traded 50 industrial assets during the first nine months of the year, according to CommercialEdge data. These encompassed more than 3.5 million square feet and changed hands at an average of more than $171 per square foot, for a total industrial investment volume north of $264 million.

Although investors exchanged one more property this year compared to the same period of 2023, last year’s average price per square foot rose upward of $415, the same source shows. The first nine months of 2023 saw more than 4 million square feet of industrial space being traded.

Another significant transaction in metro Austin was EQT Exeter’s purchase of 110 SE Inner Loop, a 449,642-square-foot asset in Georgetown, Texas. Portman Holdings sold the property for $60.9 million in March.

The post Triten Enters Austin With Logistics Campus Purchase appeared first on Commercial Property Executive.

RBC Wealth Management has signed a 11,710-square-foot, seven-year lease at Uplands Corporate Center, a two-building Class A office campus in the Southwest submarket of Austin, Texas.

The tenant, a division of RBC Capital Markets LLC and part of Royal Bank of Canada, will open its office by the end of this year at the Uplands II building.

Drawbridge Realty is the owner of the 291,448-square-foot property. With the closing of this deal, there are 14,000 square feet of remaining space available for lease.

READ ALSO: Austin Office Market Commands High Prices

Current tenants at Uplands Corporate Center include Tricentis USA Corp., WuXi Clinical, Quisitive, Kimley-Horn and ResearchPoint Global, among others, according to CommercialEdge.

Cushman & Wakefield’s Director Ricky Whiteley negotiated on behalf of the tenant, while the company’s Executive Director Matt Frizzell and Executive Managing Director Kevin Granger represented the landlord and are in charge of leasing.

A closer look at the Austin office campus

Drawbridge Realty acquired the 167,368-square-foot Uplands I in 2014 for $42.5 million, from seller CBRE Investment Management, the same source shows. The owner added a second building to the campus in 2021. The 124,080-square-foot project was subject to $33.4 million in construction financing, provided by Bank of America.

Designed by Levy Architects, the Uplands II is the first building in Austin to achieve all three LEED, WELL Compliant Silver Building and RESET Air Standard certifications. The property’s HVAC systems feature UV purifiers and high exchange rates for outside air, allowing for an improved air quality.

Completed between 2007 and 2021, the campus includes five passenger elevators, collaborative lounge with covered and uncovered areas, dining spaces, parking spots and EV charging stations. Both buildings also provide access to an on-site fitness center, adjacent garden and a food truck court with running and walking trails.

Located at 5301 Southwest Parkway, the property is 8 miles from downtown Austin, 13 miles from Austin-Bergstrom International Airport and within 33 miles of San Marcos Regional Airport.

Leasing activity in the metro

As of August, Austin’s office vacancy rate clocked in at 27.8 percent, marking a 660-basis-point increase over a 12-month period, according to a recent CommercialEdge report.

Earlier this month, IBM signed a 320,000-square-foot full-building lease at Domain 12 in Austin, owned by Cousins Properties. The tenant is assuming Meta Platforms’ existing commitment at the property, while also extending its commitment to 2040.

In February, Transwestern Real Estate Services landed the leasing assignment of a 521,401-square-foot office portfolio in the metro. The collection, owned by Pacific Oak Capital Advisors, includes eight buildings across three office campuses.

The post Drawbridge Inks Long-Term Lease at Austin Office Campus appeared first on Commercial Property Executive.

Growing vacancy rates are also affecting high-volume secondary markets and Austin is no exception. Additionally, the rise of discounted sales is expected to continue in the U.S. The Texas capital recorded significant office deals, placing it among the best-performing markets for transactions in the U.S.

As of July, 5.7 million square feet of office space was under construction across 32 office properties in Austin, representing 5.2 percent of the existing stock. The figure is well above the national average of 1.3 percent, positioning Austin at the forefront of Sun Belt metros, followed by Nashville (3.4 percent), Tampa (2.9 percent), San Diego (2.8 percent) and Charlotte (2.1 percent).

CommercialEdge has developed a new tool that identifies office space that would easily lend itself to residential conversion. With the debut of its Conversion Feasibility Index, the data provider offers an image of what amount of space in the top U.S. markets can be rolled into residential based on a comprehensive list of features. While Austin is not part of the top markets on the list, some of its high-volume secondary peer markets are near the top of the ranking.

READ ALSO: 9 New Rules of Coworking

Austin’s under-construction pipeline ranked second across similar markets in terms of actual square footage underway, after Dallas (6.2 million square feet) and followed by San Diego (3.2 million square feet) and Houston (2.8 million square feet).

One notable office development currently under construction is The Republic, Lincoln Property Co.’s 816,560-square-foot high-rise in downtown Austin. The company, together with co-developers Phoenix Property Co. and DivcoWest, broke ground on the 48-story project in 2022, with expected completion date set for June 2025.

Year-to-date through July, developers delivered 945,519 square feet of office space across 14 properties, showing a 38.7 percent year-over-year decrease in office completions.

Significant projects that came online this year include Uptown ATX’s One Uptown, a 381,739-square-foot Class A property owned by Brandywine Realty Trust. The 14-story office building was completed in January and is part of the developer’s 66-acre mixed-use campus dubbed Uptown ATX, to include 3.2 million square feet of space upon delivery.

Office investment in Austin

Year-to-date through July, Austin recorded $699 million in office deals, with 30 properties totaling 2 million square feet changing hands at an average price of $432 per square foot. Among peer markets, the metro outperformed Dallas ($584 million), Houston ($482 million) and Tampa ($392 million), while on a national level it placed sixth, after Phoenix, that had $705 million in sales.

The Texas capital stood out as the priciest office metro among similar markets, followed by San Diego ($277 per square foot), Nashville ($205 per square foot), Phoenix ($171 per square foot) and Charlotte ($143 per square foot).

One notable deal in the metro was The City of Austin’s $87 million acquisition of 2400 and 2410 Grover Blvd., an office asset that will be converted into affordable housing. Plans call for the creation of some 135,000 housing units until 2028. The 193,788-square-foot, two-building office campus is occupied by the seller, Tokyo Electron, which will continue its occupancy for another year.

Another significant transaction was the $25.7 million sale of Las Cimas IV, a 138,008-square-foot office property at 900 S. Capital of Texas Highway in Southwest Austin. The five-story building was purchased by Formentera Partners from Los Angeles County Employees Retirement Association, with the help of an $18 million loan originated by StanCorp Financial Group.

Austin office market posts high vacancy rates

Austin’s office vacancy reached 22.9 as of July, showing a 240 basis-point increase year-over-year and exceeding the national average of 18.1 percent. The rate was higher than the 22.0 percent recorded in the first month of 2024, but fell from the 23.3 percent May figure—the highest number so far this year.

Above-average office vacancies were also recorded across similar markets, such as Houston and Dallas, where the figure stood at 23.4 percent and 21.4 percent, respectively. Orlando had the lowest rate as of July, at 15.6 percent.

Transwestern Real Estate Services landed a significant leasing assignment in February this year, when it became the exclusive leasing agent for a three-property office portfolio in the metro. Totaling 521,401 square feet across eight building, the ensemble is owned by Pacific Oak Capital Advisors and includes Great5 Hills Plaza, Westech 360 and Park Center.

Coworking share smaller than national average

As of July, the metro’s coworking inventory included 859,163 square feet of shared office space, accounting for 1.5 percent of the market’s total leasable office space, below the national figure of 1.8 percent.

Year-to-date though July, the flex office provider with the largest footprint of coworking space in the Austin remained WeWork, with locations totaling 302,087 square feet. The company was followed by Austin Film Society, with 175,000 square feet, Regus, with 157,736 square feet, Cubework, with 112,000 square feet and Expansive, with 106,830 square feet.

In April, FUSE Workspace expanded its footprint in East Austin, with a new location at an energy-efficient, three-story Class A building totaling 33,000 square feet, expected to open this September. The flex office provider’s new space will include 126 private offices, five meeting room and an expansive coworking space with group and individual seating, among other features.

The post Austin Office Market Commands High Prices appeared first on Commercial Property Executive.

IBM has signed a 320,000-square-foot, full-building lease at Cousins Properties’ Domain 12 in Austin, Texas. The tenant will assume Meta Platforms’ existing commitment, according to The Business Journals, and extend its maturity date from 2031 to 2040. The assumption will be effective starting January 2026.

Last year, the Fortune 100 company signed an agreement for 320,000 square feet at Hines’ Domain Northside, a 500,000-square-foot development currently underway. However, that deal fell through.

Over the past couple of years, Meta has been cutting back its office space across the U.S. In 2022, the company exercised an early termination clause for 200,000 square feet in Manhattan. That same year, the company also laid off more than 10,000 employees and announced a 120,000-square-foot sublease in Austin.

Domain 12, up close

Domain 12 came online in 2020. Cousins completed the Class A property with funds from a $120 million self-financed construction loan set to mature by the end of next year, according to CommercialEdge information.

The 17-story building, which includes eight levels of parking, has floorplates ranging between 31,137 and 33,405 square feet, a fitness center, six passenger elevators and outdoor seating.

The LEED Silver-certified property is at 11800 Alterra Parkway within the master-planned Domain development, close to the NORTHSIDE shopping center. Downtown Austin is 11 miles away, while the Austin-Bergstrom International Airport is 18 miles southeast.

Austin’s office leases slow down

Austin’s office market experienced a slowdown in leasing activity during the second quarter of this year, according to a Cushman & Wakefield report. The metro recorded a negative absorption of 51,000 square feet, causing its vacancy rate to rise 150 basis points quarter-over-quarter, reaching 28.8 percent.

In one of the quarter’s leasing deals, O’Melveny & Myers signed a 28,000-square-foot commitment at The Republic, the same source shows. Developed by Lincoln Property Co., the 830,000-square-foot tower is scheduled to come online next year.

The post IBM Scoops Up 320 KSF in Austin appeared first on Commercial Property Executive.

Four Hands, an Austin-based high-end furniture wholesaler, has leased the entire Building 2 of Airport Logistics Center in Del Valle, Texas. At 570,000 square feet, the deal marks the largest industrial lease in greater Austin so far this year, according to the participants.

JLL represented the landlord, Dallas-based Dalfen Industrial, which developed the 800,000-square-foot campus. Endeavor Real Estate Group assisted the tenant.

The property is in the Airport submarket of the Texas capital. The company will use the space to consolidate operations, which are currently in other locations in the metro.

Though industrial development has been robust in Austin recently, the building at 6106 Ross Road was the only available space larger than 300,000 square feet close to Four Hands’ operations, according to JLL.

The lease makes Four Hands one of the largest industrial tenants in the greater Austin market, with a total footprint of 1.2 million square feet. That footprint includes the Airport Logistics Center commitment and represents an increase in Four Hands’ space even after some of the leases at its current locations expire next year.

JLL Senior Managing Director Ace Schlameus and Senior Vice President Kyle McCulloch handled the transaction on behalf of Dalfen. Chad Marsh, managing principal at Endeavor, represented Four Hands.

Austin industrial development still robust

Industrial markets nationwide have seen building booms in response to pandemic-era demand for space. Austin, with an expansive overall economy, has enjoyed a particularly robust industrial market in recent years.

Some 5.5 million square feet of industrial spec space came online during the first half of 2024 in greater Austin, a pace that thus far exceeds development last year. During all of 2023, developers delivered a record 8 million square feet of industrial in the market, JLL notes.

The influx of space has driven the overall Austin vacancy rate to 12.7 percent, with about 10.8 million square feet unoccupied, though roughly 20 percent of that has been leased and will be occupied in the near future. Of the remainder of the vacant space, about 5.6 million square feet is concentrated in structures that were completed last year or this year, JLL reports.

The post Local Tenant Inks 570 KSF Industrial Lease in Austin appeared first on Commercial Property Executive.

Amid a nationwide shrinking industrial pipeline, Minneapolis-based Ryan Cos. and capital partner DWS Group have teamed up again for a major project, Austin Business Journal first reported. This time, the companies are planning a six-building, 1.2 million-square-foot Class A industrial development outside Austin, Texas, called Mustang Crossing.

The 127-acre site is at 13754 Gregg Manor Road, in Manor, Texas. JLL Senior Managing Director Ace Schlameus will be in charge of leasing at the property. The industrial buildings were designed to range from 58,000 to 435,000 square feet.

READ ALSO: Industrial Development Pipeline Shrinks

The first phase of construction includes only four of these buildings, at a cost of nearly $59 million, documents filed with the Texas Department of Licensing and Regulation show. According to the same source, construction is scheduled to begin this December and conclude by March 2026. These first four buildings are:

• Building 1—291,200 square feet; $27.8 million
• Building 2—141,120 square feet; $14.3 million
• Building 3—58,240 square feet; approximately $7 million
• Building 4—91,520 square feet; $9.7 million

The development is near Texas State Highway 130 and U.S. Route 290. This will allow for direct access to Austin and the surrounding metro areas including. The site is 4 miles from the Austin Executive Airport; 17 miles to ABI Airport; 106 miles to San Antonio; 150 miles to Houston and 189 miles to the Dallas-Fort Worth area.

All of the buildings will be rear load, except for Building 5, which will be a cross-dock facility and the largest, at 434,560 square feet. It will also have 40-foot clear heights, four grade doors, 92 trailer stalls and 503 car parking spaces.

Building 3, which is the smallest, will have 28-foot clear heights, 19 docks, two grade doors and 70 car parking spaces.

Other specs include:

• Building 1—36-foot clear heights, 60 docks, six grade doors, 37 trailer stalls and 420 car parking spaces
• Building 2—36-foot clear heights, 35 docks, four grade doors, 47 trailer stalls and 211 car parking spaces
• Building 4—32-foot clear heights, 35 docks, two grade doors, 43 trailer stalls and 204 car parking spaces

Ryan Cos. grows pipeline amid nationwide slowdown

U.S. industrial completions are projected to decline in the following years, according to the latest CommercialEdge report. The supply pipeline has shrunk for six consecutive quarters. Between 2021 and 2022, more than 1.1 billion square feet began construction. Last year, only 357.5 million square feet broke ground, the same source shows.

However, Ryan Cos. remained active as a developer, with several ongoing projects, most recently in Arizona. One of the firm’s Phoenix developments is Schrader Farms Business Park, slated to comprise 432,000 square feet.

In July 2021, Ryan and DWS started construction on the Confluence at Mesa Gateway, a six-building, 516,121-square-foot speculative industrial park in Mesa, Ariz. The project’s second phase, comprising 354,000 square feet across three buildings, came online in October.

The post Ryan Cos., DWS Group Eye 1.2 MSF Industrial Park in Austin appeared first on Commercial Property Executive.

Logistics Property Co. has broken ground on 12821 Titanium St., a two-building, 408,160-square-foot industrial project in Austin, Texas., marking its first development in the area. Funding includes a self-financed construction note of $58 million, CommercialEdge information shows. Delivery is expected in 2025’s second quarter.

FCL Builders serves as the development’s general contractor. McFarland Architecture provided design services, while Garza EMC was tapped as the civil engineer. The former also filed plans on behalf of MIC Texas Corp., according to the Texas Department of Licensing and Regulation. MIC is associated with a California-based escrow company.

READ ALSO: Investing in Sun Belt Light Industrial Properties: A CIO’s View

The project will consist of two buildings—a 174,944-square-foot rear-load property and a 233,216-square-foot cross-dock facility. Across both structures, the development will include 108 dock doors, six ramps measuring 12 by 14 feet, as well as 24 levelers and 557 parking spaces.

Building one and two will feature 60- by 52-foot and 50- by 52-foot column spacing, respectively. The clear heights are slated to reach 32 feet for the rear-load facility and 36 feet for the cross-docked property.

Furthermore, two truck courts will be available, with a shared one between the two facilities measuring 210 feet, as well as one serving only the cross-dock property at 185 feet. Also specific to the cross-dock facility will be 48 trailer parking spaces.

The development’s site is located less than 2 miles from Texas Route 130 and some 4 miles from the Austin Executive Airport. Samsung’s Austin Semiconductor Facility and Taylor Chip Plant operate some 3 and 16 miles away, respectively.

Austin’s industrial vacancy rate on the rise

As of June, Austin’s industrial pipeline had upward of 13.9 million square feet of under-construction space, a report by JLL shows. Year-to-date through June, more than 6.3 million square feet of industrial space came online.

Of these, 5.5 million square feet debuted as speculative space—more than half of the record 8 million square feet registered in 2023 during the same interval, the report goes on to show.

With an increase in supply, the total vacancy rate clocked in at 12.7 percent as of June, JLL reveals. Of the vacant available space, 65 percent is concentrated in facilities constructed since 2023.

Titan Development is slated to bolster Austin’s pipeline with a 1.3 million-square-foot industrial development in Leander, Texas. The company received city approval earlier this year and expects to break ground on the three-phase, $84 million project in the third quarter.

The post Logistics Property Breaks Ground on 1st Austin Project appeared first on Commercial Property Executive.

Stockdale Capital Partners has acquired 1401 Philomena @ Mueller, a 130,000-square-foot medical office building in Austin, Texas. Gemdale USA sold the asset, according to CommercialEdge.

The five-story property came online in 2023. Built on 1.7 acres, the project was subject to a $35 million construction loan that BMO Bank provided in 2021, the same source indicates. STG Design was the building’s architect, with Rogers – O’Brien Construction as general contractor.

The medical office sector continues to fare well in what is currently a challenging economic landscape. High occupancy and tenant stability are among the key factors attracting investors. Nevertheless, experts found that asset values have indeed decreased over the course of 2023.

READ ALSO: These Markets Top MOB Investment Activity

The LEED-Gold certified building features controlled access, wide column spacing and higher deck-to-deck heights, with floorplates ranging between 20,000 and 29,000 square feet. The health-care center also includes a 559-stall parking garage. According to the new owner, the asset marks the first non-affiliated, purpose-built Class A medical office building to be developed in Central Austin since 2023. GROW Pediatrics and Adolescent Medicine are among the property’s tenants.

Located at 1401 Philomena St., the health-care center is part of Mueller Austin, a 700-acre master-planned community. The urban village is a redevelopment of the former Robert Mueller Municipal Airport.

The building is adjacent to Dell Children’s Medical Center, has access to Interstate 35 and is less than 5 miles north of downtown Austin. Other medical providers in the surrounding area include Austin Emergency Center, CommUnity Care: David Powell Health Center and St. David’s Medical Center.

The post Stockdale Capital Buys 130 KSF Austin MOB appeared first on Commercial Property Executive.

The Texas Division of Emergency Management has plans for a $423 million headquarters and emergency operations center in Austin, Texas, the Austin Business Journal reported.

The TDEM is overseen by the Texas A&M University System, whose Board of Regents first approved the project, with a $360 million budget, last November. In February, the board approved a more extensive—and expensive—plan totaling $423 million.

The project reportedly will combine steel-framed and mass timber construction. Work is expected to begin next month.

A new campus with more meeting space

As things stand currently, TDEM occupies offices at 313 Anderson Lane, near the intersection of Interstate 35 and Highway 183, but this location reportedly has limited meeting space. In addition, the agency leases about 25,000 square feet of meeting rooms at a nearby hotel and has also converted 10 to 15 guest rooms there into additional meeting spaces.

READ ALSO: Top 5 Office Projects Under Construction in Austin

The plans approved in November specified a 296,000-square-foot campus on 48 acres at 4125 S. Farm-to-Market Road 973, east of Austin-Bergstrom International Airport. The complex would have included a five-story office building and the new state emergency operations center, but the recently approved amendment expanded the scope.

The extra funding will add a 38,000-square-foot sixth floor to the office building, as well as expand the overall property with a 15,400-square-foot warehouse, a 900-space parking garage and a 1,200-square-foot secure facility for the processing of sensitive compartmented information.

The new emergency operations center will be 90,068 square feet and designed to withstand 200 mph windstorms. The building is set to include meeting rooms and spaces for a joint information center, press conference room and GIS workroom.

Austin’s office pipeline soars

Austin had some 4.3 million square feet of office space under construction as of March, representing 4.6 percent of total stock, according to a recent CommercialEdge report. The metro lagged Dallas-Fort Worth, (more than 5.1 million square feet in the development pipeline), but surpassed Houston (about 1.8 million square feet underway).

Notable office projects that came online in Austin in the first quarter of this year include Uptown ATX ‘s One Uptown, a 381,739-square-foot Class A mid-rise that is part of Brandywine Realty Trust’s 66-acre mixed-use community dubbed Uptown ATX. At full build-out, the campus will include 3.2 million square feet of residential, retail and office space.

The post Texas Agency Eyes $423M Austin Campus appeared first on Commercial Property Executive.

California Bank & Trust—a division of Zions Bancorporation—provided a $34.5 million loan for the acquisition of the Class A property, according to Travis County records.

KBS purchased SouthTech Business Center for $18.6 million back in 2005, CommercialEdge data shows. Completed in 2002, the campus comprises four buildings spread across some 20 acres. Each building features 21-foot clear heights and 145-foot truck courts, with climate-controlled warehouse space. The property also includes approximately 744 surface parking spaces.

After the acquisition, KBS made capital investments in every tenant area, which contributed to an increase in the average length of tenant occupancy to more than five years, according to Senior Vice President Brett Merz. SouthTech Business Center was 93 percent leased at the time of sale.

READ ALSO: Q&A: The Expansion of Flex Warehousing Solutions

The property’s tenant roster includes Collectic Home, U.S. General Services Administration, Republic National Distributing, Movair and MedtoMarket. Over the last 10 years, SouthTech Business Center had an average annual occupancy of 97 percent.

JLL Senior Managing Director Trent Agnew, Senior Director Charles Strauss, Director Lance Young and Analyst Brooke Petzold represented the seller. Greenberg Traurig’s team included attorneys Bruce Fischer, Howard Chu and Tina Ross, together with paralegal Amanda Kennedy.

Austin industrial market sets new record

Located at 2101 E. Street Elmo Road, SouthTech Business Center is in an Opportunity Zone in Southeast Austin. The property is near the Austin-Bergstrom International Airport and the intersection of Interstate 35 and Route 71, which provides easy access across the metro.

Austin’s industrial market recorded 3.2 million square feet of completed construction in the first three months of this year, a quarterly record for speculative space and the second consecutive quarter to surpass more than 3 million square feet of deliveries, according to a recent JLL report. Approximately 21.4 percent of the total space delivered was leased upon completion.

The post KBS Sells Austin Light Industrial Campus appeared first on Commercial Property Executive.

DKC Construction Group serves at the general contractor for the build-out, while L.M. Holder III is designing the interior finishes together with Workplace Studio. International Bank of Commerce provided a $12 million loan to developer CB Capital for the building’s construction back in 2021, according to CommercialEdge data.

The three-story, energy-efficient Class A building will comprise 126 private offices, three private enterprise suites, six dedicated individual desks, five meeting rooms and an expansive coworking space with group and individual seating. Amenities at the MLK location will include three expansive outdoor covered patios, a kitchen, a café, private phone booths and members-only gym with showers. The property will also feature bike storage and approximately 100 parking spaces.

Expanding more in Austin

The future FUSE location is in East Austin, near Interstate 35—allowing for easy access across the Austin metropolitan area. The University of Texas, Waterloo Park and downtown Austin are within a 2-mile radius.

FUSE has expanded to six sites, evenly distributed between downtown and suburban Austin. An upcoming announcement will unveil a fifth location in North Austin. With the addition of the MLK site, the company’s total portfolio will exceed 125,000 square feet, featuring 533 private offices and 23 conference rooms.

As of February, Austin recorded 4.3 million square feet of office space underway across 30 properties, according to a recent CommercialEdge market update. The under-construction stock accounted for 3.9 percent of existing stock—above the national figure of 1.6 percent. So far this year, the metro ranks among the top-performing office markets in the U.S. based on its sales volume.

Austin’s coworking sector boasted 1.1 million square feet of shared office space in February, the same source shows. The figure amounted to 1.7 percent of the metro’s total leasable office space, on par with the national figure.

The post FUSE to Expand Austin Coworking Footprint appeared first on Commercial Property Executive.

Logistics Property Co. is entering Austin, Texas, with the development of a two-building industrial park. Groundbreaking on the more than 400,000-square-foot project is scheduled for this quarter, with completion expected in the second quarter of next year. AQUILA Commercial will handle leasing the campus.

The industrial park will rise on more than 31 acres at 12821 Titanium St. The location is in the Northeast Austin submarket, close to highways 130 and 290. Downtown Austin is within 16 miles of the property, while Austin-Bergstrom International Airport is some 18 miles away.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

Set to encompass nearly 175,000 square feet, Building 1 will be a rear-load warehouse with 32-foot clear heights, 36 dock-high loading doors, two ramps and eight levelers, as well as a 60- by 52-foot column spacing. Additionally, the development will have a 2,500-square-foot speculative office space, a 210-foot truck court and 361 car parking spaces.

Building 2 will be a 233,000-square-foot cross-dock facility with 36-foot clear heights, 185-foot truck court, 72 dock-high loading doors, four ramps and 16 levelers. The distribution center will also feature 196 parking spots, 48 trailer stalls and a 3,000-square-foot speculative office space.

AQUILA Commercial Senior Vice President Blake Patterson and Principal Omar Nasser will conduct the leasing efforts at the property. Last year, the duo was also tapped to lease a four-building industrial center that is expected to come online in the fourth quarter of this year. That development is coming online some 6 miles from 12821 Titanium St.

Austin’s industrial inventory is growing

Austin’s industrial sector saw 3.1 million square feet of completions in the first quarter of this year, according to a CBRE industrial report. Meanwhile, more than 16 million square feet were under construction.

Last month, Titan Development received city approvals for the construction of Leander 183 Commerce Center, an industrial campus that will measure up to 1.3 million square feet. The 115-acre development will be built in three phases, with completion scheduled in 2036.

In January, Patrinely and Realterm broke ground on Airfield 130, a 439,300-square-foot project. Upon full buildout, the campus will include four buildings ranging from 75,000 to 150,000 square feet.

The post Logistics Property Enters Austin appeared first on Commercial Property Executive.

As of February, Austin had 4.3 million square feet of office space underway across 30 properties, accounting for 3.9 percent of existing stock, above the national figure of 1.6 percent.

Among high-volume secondary markets, Austin’s under-construction pipeline relative to existing stock outperformed that of The Bay Area (2.7 percent), Dallas (2 percent), Atlanta (1.8 percent) and Denver (1.2 percent), and came in third after San Diego, which led with 5.0 percent, and Nashville, at 4.3 percent.

Significant office projects still coming online in Austin

In terms of under-construction space, Austin’s pipeline came in fourth after San Diego (5.5 million square feet), Dallas (6.7 million square feet) and The Bay Area, that led with 7.3 million square feet. In the first two months of the year, developers completed 635,250 square feet of office space across four properties, representing 0.6 percent of total stock, while also showing a 221.7 percent year-over-year growth.

Notable office projects that came online include Uptown ATX ‘s One Uptown, a 381,739-square-foot Class A mid-rise that came online in January. The 14-story office property is part of developer Brandywine Realty Trust’s 66-acre mixed-use community dubbed Uptown ATX, that at full buildout will include 3.2 million square feet of residential, retail and office.

In 2023, 2.8 million square feet of office space were added to Austin’s inventory, placing the metro third in terms of delivered square feet, trailing only Dallas (4.2 million square feet) and The Bay Area (4.1 million square feet).

Another office project recently completed is Seamless Capital’s 1301 S. Lamar Blvd., a 134,623-square-foot Class A building in Austin’s South submarket. The four-story property came online in February and has Endeavor Real Estate Group as leasing broker.

Austin’s prices still soar

Year-to-date through February, the investment volume in Austin reached $118 million, with office properties changing hands at an average of $445 per square foot. Among secondary markets, Austin outperformed Philadelphia ($44 million), Houston ($49 million) and Charlotte ($11 million), while San Diego led the pack with $142 million and Dallas followed with $127 million.

The average sale price of office properties in the year’s first two months outperformed the national figure of $179 per square foot as well as all gateway metros, becoming the most expensive office market for the time frame.

In 2023, the metro’s total sales volume reached $582 million, with office properties trading at an average of $300.30 per square foot. The investment volume placed Austin in sixth place among peer markets, with The Bay Area leading at $1.3 billion in office sales. In terms of average price per square foot, Austin ranked third, with San Diego ($328.20 per square foot) and The Bay Area ($317.10 per square foot) leading the way.

On a quarter-to-quarter basis, 2023 started with $183 million in office investments, while the second quarter ended with $215 million in deals, point after which there was a steep drop, from the $98 million recorded in the third quarter to the $86 million recorded during the last.

The most expensive office sale of last year remained Boyd Watterson Asset Management’s $142 million purchase of the VA Outpatient Clinic, a 272,636-square-foot medical office property in Southeast Austin. Healthcare Property Advisors sold the property that is operated by the U.S. Department of Veterans Affairs.

The second-most expensive office transaction was CapMetro’s $87 million acquisition of Fifth + Tillery, a 187,155-square-foot office building near downtown Austin. CIM Group sold the creative office asset, that was originally a warehouse, with redevelopment plans completed in 2020.

Office vacancy doesn’t curb rise in Austin

As of February, Austin’s office vacancy rate reached 22.1 percent, one of the highest among gateway markets, outperformed in the state only by the 24.5 percent rate recorded in Houston. The office vacancy rate fluctuated throughout 2023, ranging from 20.4 percent in February, 19.9, in the summer then ending the year at 21.1 percent.

One significant office lease in the metro remains IBM Corp.’s 320,000-square-foot lease at The Domain, two upcoming office towers developed by Hines, that will total 500,000 square feet. The company already occupied 800,000 square feet at The Domain, allowing it to consolidate its Austin teams in one location.

In February this year, Transwestern Real Estate Services landed the leasing assignment of a three-property office portfolio totaling 521,501 square feet. The buildings, Great Hill Plaza, Westech 360 and Park Center, are owned by Pacific Oak Capital Advisors.

Austin’s coworking sector still steady

Austin’s coworking sector registered 1.1 million square feet of shared office space, having the same inventory as San Diego but outperforming Nashville’s 632,270 square feet and Charlotte’s 505,060.

On a share of coworking space as percentage of total leasable office space, Austin reached 1.7 percent, the same as the national figure, as well as other high-volume secondary metros in the state, such as Dallas and Houston. Atlanta and Denver led the rankings, both at 2.0 percent.

Year-to-date through February, WeWork remains the company with the largest footprint of coworking space in the metro, with locations totaling 398,450 square feet. The flex office provider was followed by Cubework, with 219,040 square feet, Austin Film Society, with 175,000 square feet, Regus, with 157,736 square feet and ReadySpaces, with 106,211 square feet.

In January, Industrious opened a 20,573-square-foot coworking space in Austin, marking its fourth location in the city. The flex office provider partnered with PGIM Real Estate and HPI Real Estate and Investment Services on its expansion strategy. The new location is at PGIM’s 301 Congress Ave., a 418,388-square-foot office tower.

The post Austin Begins 2024 With Strong Office Sales appeared first on Commercial Property Executive.

Endeavor Real Estate Group has purchased Plaza on the Lake—a 120,798-square-foot office building in Austin, Texas—through its Endeavor Opportunity Partners III discretionary fund. The previous owner was a joint venture between IPERS and Clarion Partners, CommercialEdge data shows.

The asset previously traded in 2014 for $36.9 million, the same source reveals. Newmark brokered the current transaction on behalf of the seller.

Rising three stories on a 4.5-acre site, the 1985-completed office building went through a $5 million capital improvement plan in 2021. The property features an outdoor amenity space and gym, as well as paddle board and kayak storage.

READ ALSO: 5 Strategies for Distress Buyers

Located at 5000 Plaza on the Lake in Southwest Austin, the property is roughly 7 miles southwest of U.S. Route 183 and some 13 miles northwest of downtown Austin. Pennybacker Bridge and Lake Austin are within walking distance of the office building, while Davenport Village—a 129,000-square-foot retail center—is 1 mile away.

Newmark Vice Chairmen Chris Murphy, Robert Hill and Gary Carr represented the seller.

Austin’s office fundamentals

At the time of the deal, Plaza at West Lake was 68 percent leased, with 89 percent of the tenant roster secured during the last 3 years. According to a Newmark report, leasing activity totaled 4.1 million square feet in Austin last year, below the 16-year annual average of 7.4 million square feet. Unsurprisingly, the occupancy rate took a dip during 2023, with vacancy increasing by 420 basis points to 22.2 percent.

Despite the increasing vacancy rate, Austin’s office-using job market recorded 424,510 employees in November—a 33.2 percent jump since 2019, the same report reveals. However, the market’s overall unemployment rate at the end of 2023 rose by 62 basis points on a year-over-year basis, climbing to 3.4 percent, but still below the 5-year average of 3.9 percent.

As reported in a recent market update, Austin witnessed 2.9 million square feet of office space changing ownership year-to-date through November 2023, totaling $496 million. The average price per square foot reached $316.4, surpassing the national average of $192.8 per square foot. Last August, CIM Group sold Fifth + Tillery, a 182,700 square feet office building, to Capital Metro for $87 million, according to Austin American-Statesman.  

The post Endeavor Snaps Up 120 KSF Austin Office Building appeared first on Commercial Property Executive.

Titan Development has received city approvals for the development of Leander 183 Commerce Center. Plans call for a Class A, 115-acre industrial campus encompassing as much as 1.3 million square feet of space in Leander, Texas.

A Titan spokesperson told Commercial Property Executive that the company expects to start construction in the third quarter of this year. The $84 million project will be built in three phases, with final buildout scheduled for 2036.

Leander City Council’s approvals also include up to $3.5 million in tax incentives. In the upcoming 10 years after the development’s completion, local authorities expect as much as $18.5 billion in tax and utility revenues for the city.

Leander 183 Commerce Center’s three development phases will bring:

• 200,000 square feet of space during Phase I, with $24 million invested by 2029
• 400,000 square feet of space during Phase II, with $48 million by 2032
• 700,000 square feet of space during Phase III, with a total of $84 million by 2035

The business park will rise at the northeast corner of Hero Way and County Road 270, where it will provide easy access to the region. It will be 12 miles from Georgetown, Texas, 30 miles from Austin and within 32 miles of Austin-Bergstrom International Airport.

Growing Austin’s industrial sector

Leander City Council also approved the annexation and rezoning request for the project in October last year, according to the Austin Business Journal. The same source reveals that Titan Development worked for two years to find a suitable location that can benefit from targeting manufacturing, distribution and warehousing users.

Since the start of 2024, multiple other industrial projects were announced across metro Austin. Patrinely and Realterm commenced construction on Airfield 130, a 439,300-square-foot development. The four-building Class A project will be completed in early 2025.

In late 2023, another joint venture revealed its plans to build a 520,571-square-foot project in Georgetown. Fidelis Industrial and Transwestern Investment Group purchased a 56-acre lot for the development of Berry Creek Business Park, with completion scheduled for late 2024.

The post Titan Development to Build 1.3 MSF Austin-Area Industrial Campus appeared first on Commercial Property Executive.

EQT Exeter Real Estate Income Trust Inc. has paid $60.9 million for a 449,642-square-foot industrial asset at 110 SE Inner Loop in Georgetown, Texas. The previous owner was Portman Holdings, according to CommercialEdge information.

For this first acquisition, EQRT used the proceeds from the sale of 6.2 million of Class E units of its operating partnership to EQT Exeter Holdings US.

Portman developed the property with funds from a $44.6 million construction loan originated by First National Bank of Omaha in August 2022, the same source shows.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

Completed last year, the facility is fully leased to GAF Energy, a solar roofing manufacturer which opened its second factory there in November. The building features 106 doors, 36-foot ceiling heights, 123 trailer stalls and more than 500 car parking spaces.

The 54-acre property is some 2 miles from downtown Georgetown and less than 26 miles from downtown Austin. Austin-Bergstrom International Airport is within 36 miles south. The facility is also some 5 miles from Berry Creek Business Park, an industrial campus developed by Fidelis Industrial and Transwestern Investment Group.

Exeter Property Group is the REIT’s external advisor. EQRT plans to invest about 80 percent in commercial assets, including industrial of life science properties, and 20 percent in multifamily or self-storage developments.

EQT Exeter’s recent industrial deals

EQT Exeter resulted from the 2021 merger of Exeter Property Group with Sweden-based EQT AB. The firm now owns and operates more than 2,000 properties totaling 375 million square feet.

In October, EQT paid $106 million for a two-building, 1 million-square-foot park in Fort Mill, S.C. Rockefeller Group sold the asset.

A few months earlier, the firm purchased a 1.2 million-square-foot campus in Savannah, Ga., for $120.4 million. The property was fully leased at the time of sale.

The post EQT Exeter REIT Buys Austin Industrial Asset for $61M appeared first on Commercial Property Executive.

The Teacher Retirement System of Texas has completed its Austin, Texas, headquarters with the acquisition of the Bravo Building, a 248,000-square-foot office development. Shorenstein Properties sold the property that is scheduled for completion in mid-2025.

TRS’s campus already includes the Alpha Building, a 210,000-square-foot asset that the public pension plan acquired in December 2021 for an estimated $138.1 million. At the time, the purchase price of the new HQ was expected to total about $300 million.

Both buildings are part of a three-phase, 800,000-square-foot office development within the Mueller Business District. The project’s Phase One reached completion last February.

TRS’ previous headquarters was at 1000 Red River Road in downtown Austin, some 3 miles from the Alpha and Bravo buildings. In October 2022, the pension plan sold that asset for $108 million to Alexandria Real Estate Equities, CommercialEdge data shows.

The Bravo Building, up close

The developer broke ground on the six-story project in May 2022. A year later, in September, Wells Fargo Bank provided a $83.8 million construction loan, according to the same source. Project partners include master developer Catellus Development Corp., design firm Page Southerland Page and general contractor Rogers O’Brien Construction.

READ ALSO: Top 5 Office Projects Under Construction in Austin

When complete, the Bravo Building will feature sustainable design elements including high-efficiency windows and mechanical systems, as well as 40,000-square-foot average floorplates and a 13-foot floor-to-ceiling height. The project also comprises a parking structure for 890 vehicles.

The development is taking shape at 4655 Mueller Blvd., close to a host of dining and retail options. Downtown Austin is less than 4 miles away, while Austin-Bergstrom International Airport is 14 miles southeast. The property is also some 3 miles from Fifth + Tillery, a creative office building that traded last year.

Bravo is the second out of four buildings planned by Shorenstein in the Mueller Business District. The remaining Charlie and Delta, which were not sold to TRS, have recently received construction permits and are expected to provide around 330,000 square feet of class A office and/or laboratory space.

More office space to break ground in Austin

As of February, Austin had 4.3 million square feet of office space under construction, amounting to 4.6 percent of stock, according to a recent CommercialEdge report. And the metro’s inventory is slated for a huge expansion, as the pipeline including planned projects clocked in at a whopping 20.2 percent, the highest in the U.S.

One of the planned projects is the first office building in St. John Properties’ 116-acre Northline mixed-use development. Groundbreaking is slated for this spring.

The post TRS of Texas Completes HQ With Office Buy appeared first on Commercial Property Executive.

Pacific Oak Capital Advisors has tapped Transwestern Real Estate Services to lease a three-property office portfolio in Austin, Texas, measuring 521,401 square feet across eight buildings.

Transwestern Managing Director Brandon Lester, Vice President Max Appling and Senior Associate Marshall Thurmond will spearhead the leasing efforts and provide property management at Great Hills Plaza, Westech 360 and Park Center.

The assets last traded in 2013 in a portfolio transaction, when KBS Realty Advisors acquired them for $76 million from CalSTRS, CommercialEdge data shows. In 2019, the board of three KBS-managed trusts moved their existing advisory arrangements to Pacific Oak.

The office portfolio, up close

Westech 360 is a four-building campus totaling 175,557 square feet. The 1986-completed park went through cosmetic renovations in 2014, including upgraded atrium lobbies, a fitness center and a conference facility. Plans for one of the buildings call for four new speculative suites ranging from 3,575 to 8,239 square feet, with completion expected in the second quarter of 2024.

READ ALSO: Top 5 Office Projects Under Construction in Austin

Tenants at the 10-acre property include Office Evolutions, Ogden & Latson and Evernote. The campus is at 8911 N. Capital of Texas Highway, close to a host of dining and retail options, including shopping mall The Arboretum. Downtown Austin is 10 miles southeast.

Completed in 1985, Great Hills Plaza is currently undergoing a full-building capital renovation plan. Features of the 140,748-square-foot facility include an upgraded lobby, atrium lounges and elevator lobbies, along with new speculative suites that are scheduled for completion later this year. Regus, Pattern Bioscience and Intera are some of the tenants.

The three-story building at 9600 Great Hills Trails is less than a mile from Westech 360 and some 6 miles from Park Centre. Austin-Bergstrom International Airport is some 17 miles away.

The three-building Park Centre came online in 2000 and includes 750 square feet of ground-floor retail space. Amenities comprise a fitness center, more than 800 parking spaces, a tenant lounge and outdoor gathering spaces. Microchip is one of the tenants at the 205,096-square-foot park. Located at 8601 Ranch Road 2222, the property is 11 miles from downtown Austin and 21 miles from Austin-Bergstrom International Airport.

Austin’s office market shows mixed signals

According to the latest CommercialEdge office report, Austin’s listing rate clocked in at $41.2 as of December, above the $37.6 national average. However, the metro’s vacancy rate during the same month was 21.1 percent, 280 basis points higher than the country’s average.

In May, IBM Corp. leased 320,000 square feet at a two-tower office development in Austin. Slated for completion in 2027, the 14-story buildings will encompass 500,000 square feet.

The post Pacific Oak Taps Transwestern to Lease Austin Portfolio appeared first on Commercial Property Executive.

Called Airfield 130, the project is being constructed on a 34.5-acre site in the southeast Austin airport submarket. Buildings will range from 75,000 square feet to 150,000 square feet.

“The largest driver of Realterm’s interest in the project was the strategic in-fill nature of the location with immediate access to key transportation nodes such as Highway 130, providing potential users with best-in-class access to the Austin CBD, Tesla Gigafactory and the growing Austin suburbs,” Glenn High, vice president of Fund & Asset Management at Realterm told Commercial Property Executive. “Additionally, several of our buildings will be differentiated from the rest of the Austin industrial stock due to their on-site trailer parking.”

The project site is some 6.5 miles from the intersection of State Highways 130 and 71, providing access east and west throughout the Austin area. Interstate 35 is approximately 45 miles north of Airfield 130, providing access through Waco and the Dallas-Fort Worth areas.

Located near SH 130 and McAngus Road, Airfield 130 is about 12 miles from downtown Austin. The Austin-Bergstrom International Airport is within 7 miles from the site.

According to CommercialEdge data, building one will be 124,320 square feet, building two will be 149,280 square feet, building three will be 90,950 square feet and building four will total 74,800 square feet. Each asset is anticipated to include 32-foot clear heights, 129 dock-high doors and 190-foot truck court depths.

The development is scheduled for completion in the first quarter of 2025. Catamount Constructors is the project’s general contractor. KBC Advisors’ Mo Green, Trey Blasingame and Will Bost will head up leasing under the direction of Dennis Tarro of Patrinely.

Austin industrial activity

Considering the increased trade with Mexico, the Texas region has become a national leader for industrial development, CommercialEdge data shows. Specifically, Austin came in fifth nationwide for new industrial construction starts in 2023, outranked by other Texas markets such as Dallas-Fort Worth and Houston.

Late last year, Fidelis Industrial and Transwestern Investment Group acquired 56 acres in the Austin area. The joint venture plans to build an industrial campus totaling 520,571 square feet. The project is expected to come online in the fourth quarter of this year.

The post Patrinely, Realterm Break Ground on Austin Industrial Campus appeared first on Commercial Property Executive.

Industrious has teamed up with PGIM Real Estate and HPI Real Estate and Investment Services to open Industrious at 3rd & Congress, a 20,573-square-foot coworking space in Austin, Texas.

The flex workspace location, which marks Industrious’ fourth in the city, is situated within PGIM’s 22-story office building at 301 Congress Ave. The company purchased the 418,388–square-foot property in 2015 for $240 million, CommercialEdge data shows.

Industrious at 3rd & Congress provides 251 desks, 35 offices for teams of as many as 20 people, 20 phone booths and four conference rooms. Amenities include weekly happy hours, unlimited color printing, a wellness room, as well as daily breakfast and snack offerings. Tenants also have access to the building’s ground-floor retail space, conference center and Tacodeli restaurant.

The 301 Congress Ave. building is less than a mile from downtown Austin, next to Interstate 35 and several dining and retail options. The property’s tenant roster includes Morgan Stanley, Teza, EDF, NinjaOne and Cordell & Cordell.

Focusing primarily on locations within mixed-use neighborhoods, where people can benefit from a live-work dynamic, Industrious is rapidly expanding its portfolio across multiple markets. Industrious at 3rd & Congress marks the company’s ninth location in Texas, following the addition of a 23,489-square-foot coworking space in downtown Houston in July last year. The coworking space operator also has a presence in Dallas and Plano, Texas.

The post Industrious Expands Austin Coworking Footprint appeared first on Commercial Property Executive.

Construction activity was concentrated in downtown Austin, where eight office projects—including the two largest on our list—encapsulated more than 2.5 million square feet. Developers also focused their efforts on East Austin: Seven projects totaling 1.3 million square feet of office space were underway in the submarket.

CommercialEdge identified the largest office projects under construction in the metro as of November 2023, listed below. These projects collectively accounted for 2.7 million square feet of office space, representing 48 percent of the metro’s total pipeline.

1. The Republic

In the second quarter of 2022, Lincoln Property Co., Phoenix Property Co. and DivcoWest broke ground on The Republic, the biggest office project underway in Austin. Completion of the 48-story tower is scheduled for the first quarter of 2025. The property will feature 833,145 square feet of office space at 401 W. Fourth St. in downtown Austin.

Located across from Republic Square Park, the building’s design will integrate seamlessly with the historic surroundings. Its entrance features a green public plaza, extending the park's ambiance. Each office floor will include a 750-square-foot private terrace. Additional amenities will comprise conference rooms, a fitness center, a club room with a lounge and bar and a 25,000-square-foot outdoor terrace.

Bank OZK funded the construction with a $324 million loan. The development team includes Duda Paine Architects as design architect, HKS as architect of record and sustainability consultant and TBG Partners as landscape architect. Harvey-Cleary serves as general contractor, while BDD is the structural engineer. The roster of tenants include Kirkland & Ellis and Vista Equity Partners, which signed a lease to occupy 220,000 square feet within the building.

2. Waterline

Another large-scale project that started construction in 2022 is Waterline, a mixed-use development by Lincoln Property Co. and Kairoi Residential. Measuring a record-breaking height of 1,022 feet, the asset is set to become Austin’s tallest tower. The 74-story skyscraper will include 700,000 square feet of office space, a 251-key 1 Hotel Austin, 24,000 square feet of retail and dining on the ground level and 352 residential units on the upper floors. Completion is expected in the second quarter of 2026.

The project is rising at 98 Red River St. in Austin’s central business district, overlooking Lady Bird Lake. It will be easily accessible via foot, bicycle and car, as Waterline rises at the start of Austin’s first light rail line, connecting it to the wider city. The architect of record is HKS Architects and TBG Partners serves as landscape architect. The building’s engineering team includes firms WGI, Brockett Davis Drake and Alvine, while DPR Construction acts as general contractor.

3. Springdale Green-Building B

Starting development in October 2021, San Francisco-based Jay Paul Co. initiated the construction of Springdale Green–Building B. The 447,800-square-foot office project is set to span 30 acres in East Austin, at 1011 Springdale Road. The project secured financing from Goldman Sachs through a $75 million construction loan, CommercialEdge data shows.

Situated on a former brownfield, the redesigned Springdale Green campus is a fresh take on office spaces, aiming to draw in the creative workforce. The campus features abundant outdoor amenities, revitalized landscapes and emphasizes sustainability and wellness. More than 19 acres of the site are conserved and rejuvenated with native meadows and woodlands, while a 600,000-gallon underground cistern efficiently collects and stores rainwater and air conditioning condensation.

4. Springdale Green-Building A

Also developed by Jay Paul Co., Springdale Green-Building A will comprise 385,000 square feet of office space. Slated for completion in January 2024, the six-story property will incorporate a multi-story parking lot with 1,155 spaces. The campus boasts a 23,000-square-foot fitness and wellness center, along with 36,000 square feet of outdoor terraces.

Conceived during the height of the pandemic, the environmentally conscious campus prioritizes outdoor spaces. A key feature is a one-kilometer loop boardwalk for flood safety and nature immersion, promoting physical and mental well-being. The development team includes DWG as landscape architect, Gensler as architect and Level 10 as general contractor.

5. Uptown ATX-One Uptown

Brandywine Realty Trust is currently working on Uptown ATX-One Uptown, a 381,739-square-foot mixed-use project in Austin North. Spreading across 14 stories, the project encompasses an additional 15,000 square feet of retail space and a parking lot with 1,392 spaces. The development is scheduled for completion at the beginning of 2024.

Bank of New York Mellon financed the construction with a $121.6 million loan. The office asset is taking shape on 4.2 acres within the vibrant 66-acre Uptown ATX community, which will also include 341 multifamily units coming online in the second quarter of 2024. Page Southerland Page and GFF Architects handled design duties, while White Constructions serves as general contractor.

The post Top 5 Office Projects Under Construction in Austin appeared first on Commercial Property Executive.

Sixth and Guadalupe is a 599,234-square-foot mixed-use development that came online in November. Rendering courtesy of Kairoi Residential

Austin’s office fundamentals started to cool as we approached the end of 2023, with deal volume dropping since the third quarter. Despite the deceleration in office investment, the metro still maintains its position as a magnet for developers, with its under-construction office pipeline securing the fourth spot among peer markets.

As of November, Austin had 5 million square feet of office space under construction across 35 properties, or 4.6 percent of the existing inventory—above the national figure of 1.7 percent. Among other similar markets, the metro’s under-construction pipeline relative to total stock outpaced that of Nashville (4.5 percent) and Charlotte (3.2 percent) and came in second after San Diego, which led with 4.7 percent.

Notable projects boost Austin’s pipeline

Austin’s under-construction pipeline was lower than in Dallas (6.1 million square feet) and San Diego (5.2 million square feet), but surpassed Atlanta, Houston, Charlotte and Phoenix— which had the smallest underway pipeline, totaling 1 million square feet.

Year-to-date through November, developers delivered 2.7 million square feet of office space across 34 properties, amounting to 2.5 percent of the total stock. Notable completions in the metro included the the 599,234-square-foot Sixth and Guadalupe, a Class A+ mixed-use property developed by Lincoln Property Co. Kairoi Residential and DivcoWest began site work on the project in late 2019. The development that came online in November was financed with a $272 million construction loan originated by Quadreal Finance.

Another recently completed property is Domain 9, a 332,865-square-foot Class A office building developed by Atlanta-based Cousins Properties, situated within The Domain submarket of North Austin. The project was fully leased ahead of its completion by Amazon, which announced in 2021 its plans to add 2,000 new jobs at the Austin Tech Hub.

The Republic, a 816,560-square-foot office project underway, is expected to be delivered in 2025. Image courtesy of Neoscape

Construction starts in the metro totaled 884,430 square feet spread across 16 properties, representing 0.8 percent of stock. The value surpassed Phoenix’s and Atlanta’s 0.4 percent, but was lower than the one recorded in Dallas (1.0 percent).

In January 2023, Apple moved forward with its $1 billion Parmer Lane campus. As the tech giant completed the first phase of the 33-acre, 12-building project in 2022, the company announced its plans for the second phase of the office complex. The newest addition will consist of a $120 million building dubbed Capstone Phase Two AC09, with completion expected in early 2025.

One of the largest office projects underway is The Republic, a 816,560-square-foot Class A+ high-rise in Austin’s downtown developed by DivcoWest, along with Lincoln Property Co. and Phoenix Property Co. This project is also slated for completion by early 2025.

Waterline, a 700,000-square-foot mixed-use project developed by Lincoln Property Co. and Kairoi Residential, is another significant property currently underway. With a planned height of 1,022 feet, the Class A+ tower is set to become the tallest building in the state. Construction commenced in late 2022, financed by a $742 million loan from Blackstone Group; completion is expected by September 2026. Meanwhile, Jay Paul Co.’s Springdale Green, a two-building office project totaling 832,800 square feet that broke ground in 2021, will come online this month.

In April, Redcar closed Redcar Fund II with $418 million in equity commitments. Proceeds will be used to support the firm’s expansion in Austin and its strategy of investing in urban commercial real estate and converting underperforming industrial assets into creative office properties.

Sales volume drops, prices still high

Year-to-date through November, 2.9 million square feet of office space spread across 45 properties changed hands in Austin, for a total of $496 million. On a quarter-over-quarter basis, the deals volume went up in the second quarter of 2023, totaling $215 million, while in the third quarter investments dropped to $98 million.

Compared to other gateway metros, Austin ranked third, outpaced by The Bay Area ($1.06 billion) and Phoenix ($948 million). The lowest sales volume since the start of the year was recorded in Dallas ($158 million).

Office assets in the metro changed hands at an average of $316.4 per square foot year-to-date through November, way above the national figure of $192.8 per square foot. Austin secured the third place among gateway metros, the most expensive office market being San Diego ($402.3 per square foot), followed by The Bay Area ($331.4 per square foot).

The $142 million purchase of the VA Outpatient Clinic was the largest office deal in Austin. Image courtesy of CBRE

The largest office deal since the beginning of the year was Boyd Watterson Asset Management’s $142 million acquisition of the VA Outpatient Clinic in Southeast Austin. Healthcare Property Advisors sold the 272,636-square-foot medical office property that is operated by the U.S. Department of Veterans Affairs.

Notable transactions also included the $87 million purchase of Fifth + Tillery, a 187,155-square-foot office property in Austin’s East submarket. The property was acquired in August by CapMetro from CIM Group.

In February, Aquila Commercial paid $71 million for Hartland Plaza, a Class A, 181,855-square-foot office building located within the West Central submarket. The low-rise property was also sold by CIM Group.

Austin’s vacancy increases, coworking sector still steady

Year-to-date through November, Austin’s office vacancy reached 21.2 percent, one of the highest across gateway markets. The rate has fluctuated since the start of the year, increasing from 19.1 percent in January to 22.0 percent in April, then decreasing to 19.8 percent in June; afterwards, the index had an upward trajectory.

Across other similar markets, Austin’s vacancy rate was surpassed only by Houston’s (25.4 percent). Charlotte’s (15.7 percent), Nashville’s (16.6 percent) and San Diego’s (17.7 percent) were all below the national figure of 18.1 percent.

IBM signed a 320,000-square-foot lease at Hines Domain Northside, a two-building project to be completed by 2027. Image courtesy of Hines

Significant leases in Austin include IBM Corp.’s 320,000-square-foot lease at The Domain, where the company already occupies 800,000 square feet housing 6,000 employees. The tenant will relocate to two upcoming office towers within Hines’ development, which will be known as Hines Domain Northside, and will total 500,000 square feet.

As for coworking, the metro registered 1.1 million square feet of shared space, more than San Diego (1 million square feet), Raleigh-Durham (861,208 square feet), Nashville (664,279 square feet) and Charlotte (518,576). Across gateway metros, Dallas led with 2.4 million square feet, followed by Atlanta with 2.1 million square feet.

Year-to-date through November, WeWork had the largest footprint of coworking space in Austin, with operations totaling 398,450 square feet. The company was followed by Regus, with 153,961 square feet, and Spaces, with 128,736 square feet.

In April, flex office provider Expansive announced the opening of Expansive Austin Highland, a 48,000-square-foot coworking location in central Austin. The company purchased a 53,415-square-foot office property in 2022 and began a multimillion-dollar improvement plan, with opening scheduled for May 2023.

The post Austin’s Still a Hotspot, Despite Declining Deals appeared first on Commercial Property Executive.

Berry Creek Business Park will comprise three industrial buildings. Image courtesy of Transwestern Investment Group

A joint venture between Fidelis Industrial and Transwestern Investment Group—acting on behalf of a separately managed account—has acquired 56 acres in Georgetown, Texas, for the development of Berry Creek Business Park, an industrial campus that is expected to measure 520,571 square feet.

The property is zoned for light industrial manufacturing and distribution use. Groundbreaking of the three-building project is scheduled for January, with completion expected in the fourth quarter of next year.

READ ALSO: Top 5 Markets for Industrial Transactions

Northmarq’s Vice President Buddy Hopson and Managing Director Warren Hitchcock arranged the joint venture. Transwestern’s Managing Directors Carter Thurmond and Witt Westbrook, together with Vice President Nash Frisbie, will spearhead the leasing efforts.

Berry Creek Business Park, up close

Upon delivery, Berry Creek will comprise three industrial facilities ranging from 126,722 to 253,164 square feet. Building 1 and Building 2 will have rear-load capabilities and feature 32-foot clear heights and a total of four ramps, 60 dock-high loading doors, 382 parking spaces and 23 trailer stalls. Building 3 will be a cross-dock facility that is expected to feature 36-foot clear heights, 256 parking spaces and four ramps, as well as 40 dock doors. Amenities are to include a food truck pavilion, a fitness-focused walking trail and outdoor stations.

The business park will rise at 1761 N. Interstate 35 Frontage Road, at the junction of Interstate 35 and Highway 130. Downtown Austin is some 27 miles away, while Austin-Bergstrom International Airport is within 32 miles. The location is also less than 1 mile away from a 435,714-square-foot industrial development that was recently acquired by ZT Systems.

Austin’s growing industrial pipeline

More than 18.4 million square feet of industrial space were underway in Austin as of December, according to CommercialEdge information. The metro also has more than 40.4 million square feet pertaining to planned and prospective projects.

One of the more significant developments is Hines’ 683,344-square foot industrial campus in Northeast Austin. The four-building property is slated for completion by the end of 2024.

In August, Greystar Real Estate Partners started construction on the second and last phase of a five-building industrial development in San Marcos, Texas. At full buildout next year, the park will encompass almost 500,000 square feet.

The post Fidelis, Transwestern Eye Austin-Area Industrial Campus appeared first on Commercial Property Executive.

Bluebonnet Business Center rendering. Image courtesy of AQUILA Commercial

Hines has broken ground on The Bluebonnet Business Center, a four-building, 684,344-square-foot Class A industrial center in Northeast Austin.

Upon completion in the fourth quarter of 2024, the four buildings will feature a range of cross-dock, front-load and rear-load configurations. Rentable floorplates will range from 20,000 square feet to 685,000 square feet.

According to CommercialEdge data, Building 1 will span 414,809 square feet, with 36-foot clear heights. Building 2 will measure out with 32-foot clear heights and span 92,041 square feet. Also featuring 32-foot clear heights, Building 3 and Building 4 are each anticipated to be 88,747 square feet. The center will feature EV charging stations and solar power panels.

Designed by Powers Brown Architecture and with general contractor Burton Construction, the Bluebonnet Business Center is Hines’ first industrial project in Austin. It is situated in an infill location in Austin’s East submarket, the metro’s leading industrial submarket.

READ ALSO: A Backstage Look at Hines’ Quantum 56 Project in Denver

Situated at 9219 Old Manor Rd., the project is located off of Highway 290 and Johnny Morris Road. Future tenants will be in proximity to U.S. Route 183 and State Highway 130, with larger access to the Austin and greater Texas regions.

Various dining, entertainment and retail options, including the Springdale Shopping Center, Target, Marshalls, Tres Amigos, Subway and In-N-Out are within 8 miles of the development. The Austin-Bergstrom International Airport is less than 9 miles from the Bluebonnet Business Center and downtown Austin is 5 miles to the southwest.

In prepared remarks, Leigh Ellis, principal at AQUILA Commercial, said that ideal future tenants include logistics and manufacturing companies, along with vendors to Samsung and Tesla. Both companies operate manufacturing plants around the city, and the latter moved its headquarters there in 2021.

AQUILA Commercial’s Leigh Ellis, Omar Nasser and Blake Patterson will be the leasing agents for the Bluebonnet Business Center.

While the Bluebonnet Business Center is Hines’ first industrial development in the area, the company already has a substantial footprint in Texas. Earlier this year Texas A&M University selected Hines to be the development manager for its new academic center. It is set to feature laboratories, retail and food service areas, as well as indoor and outdoor recreational spaces.

The post Hines Breaks Ground on 684 KSF Austin Industrial Center appeared first on Commercial Property Executive.

Scheels’ recently opened store in Chandler Fashion Center, in metro Phoenix. Image courtesy of Scheels

Sporting-goods chain Scheels will open its second All Sports Texas location in Cedar Park, north of Austin, in the fall of 2026. The 240,000-square-foot retail and entertainment venue will be the retailer’s 35th location, counting 32 currently operating and two scheduled to open next year, in Tulsa, Okla., and in Meridian, Idaho, near Boise.

Construction on the new store will start early next year at CedarView, a 117-acre mixed-use development near the 8,700-seat H-E-B Center. Along with a 30,000-square-foot convention center and a 250-key hotel, CedarView will also be home to a future 1.2 million-square-foot Nebraska Furniture Mart, which along with Scheels will anchor the property.

READ ALSO: Investor Appetite for Retail Returns, But…

Scheels Cedar Park will comprise 75 specialty shops as well as such family-friendly attractions as a 65-foot Ferris Wheel, a 16,000-gallon saltwater aquarium, a wildlife mountain, interactive arcade games and sports simulators, a candy shop and a cafe.

Scheels’ first Texas location opened in 2020 in The Colony, in the Dallas–Fort Worth metro. Headquartered in Fargo, N.D., the employee-owned retailer operates stores in 14 states.

Are you experiential?

Earlier this month, Scheels opened its first Arizona location, a two-level, 250,000-square-foot store in Macerich’s 1 million-square-foot Chandler Fashion Center in metro Phoenix. That store too features a Ferris wheel, arcade, cafe and candy shop.

Entertainment and experiential concepts continue to drive much retail development. Retail gurus who’ve shared their observations about this trend with Commercial Property Executive in recent months included Steve Williamson, Transwestern’s managing director of retail services and urban land services; Garrick Brown, vice president of real estate intelligence and business development at Gallelli Real Estate; and James Cook, director of retail research at JLL Americas.

The post Scheels to Anchor Major Austin Mixed-Use appeared first on Commercial Property Executive.

ZT Systems’ facility will operate at full capacity in 2024. Image courtesy of ZT Systems

ZT Systems has acquired a 435,714-square-foot industrial development in Georgetown, Texas, near Austin, to serve as its future cloud-computing manufacturing site. The previous owner was Titan Development, according to CommercialEdge data.

The future factory will meet the increasing demand data center operators see for infrastructure expansion, especially related to cloud computing and AI technology applications. At full capacity, by the end of 2024, the facility is expected to employ more than 1,500 highly skilled individuals.

Coming online at 101 Velocity Drive within the 146-acre NorthPark 35, the industrial building is slated for delivery later this year. Titan broke ground on the project in 2022, financing its construction with a $30.3 million loan from Washington Federal Bank, due to mature in 2030, CommercialEdge shows. Upon completion, the property will feature a 36-foot clear height and some 425 parking spaces.

The campus is just west of Interstate 35 and close to Highway 130, roughly 32 miles north of downtown Austin. It is also adjacent to the Georgetown Executive Airport.

Greater Austin’s industrial pipeline

Some 19.4 million square feet of industrial space were under construction in Greater Austin as of October, CommercialEdge information shows. Of the total, 7 million square feet have entered the development pipeline since the beginning of the year.

In August, Greystone broke ground on the second and last phase of a 500,000-square-foot industrial park in San Marcos, Texas. At the time, completion was scheduled for early 2024.

Also in San Marcos, a 2,000-acre industrial project moved forward in May. At full build-out, this logistics park will be the largest master-planned industrial property in the U.S.

The post ZT Systems Eyes Austin Manufacturing Facility appeared first on Commercial Property Executive.

Rendering of the Brodie Oaks shopping center redevelopment in southwest Austin, Texas. Image courtesy of Barshop & Oles Co.

The Austin City Council has approved a planned unit development rezoning that will allow developers Barshop & Oles and Lionstone Investments to proceed with their $1 billion redevelopment of the Brodie Oaks shopping center in southwest Austin, Urbanize reported.

The under-used retail complex, at South Lamar Boulevard and South Capital of Texas Highway/Loop 360, was originally built in the 1980s. The redevelopment will create a 37.6-acre mixed-use district tentatively encompassing nearly 1.3 million square feet of office space, 1,700 residential units, restaurants, retail space and possibly a 200-key hotel, along with 13.7 acres of open space. Plans call for nine buildings up to 25 stories in height.

The redevelopment plan had to overcome community opposition regarding building heights and environmental impacts. In response and in addition to the green space, the design was modified to slash the existing amount of impervious cover.

The project has been in process for at least four years. The city council’s approval reportedly means that work on the final designs and the first phase of permitting could start by next year. Construction on the first phase could start in 2025 and wrap up by 2027, while overall completion of the entire redevelopment might take up to 10 years.

READ ALSO: Discount Grocers Stocking CRE Opportunity

Besides Barshop & Oles and Lionstone, the redevelopment team includes Overland Partners (architecture), DPZ Codesign (urban planning), Nelsen/Nygaard (transportation planners), BOE (transportation consultants), Speck and Associates (design), Armbrust and Brown (legal), and LJA Engineering.

Slow for a while

The approximately 10-year time frame for building out the Brodie Oaks redevelopment might be a good thing, given the current state of Austin’s office market. The ongoing expansion of sublease vacancy is a factor in pushing overall vacancy to 21.3 percent, an increase of 70 basis points just since the first quarter, according to a second-quarter report from CBRE.

On the positive side, new construction is slow; just one building, of about 33,000 square feet, was completed in the second quarter. Further, CBRE reports, “Austin continued to lead the top metros in the nation in return-to-work efforts,” with an average building occupancy rate of 58.2 percent in late June, according to Kastle Systems.

The post $1B Austin Mall Makeover Gets Key Approval appeared first on Commercial Property Executive.

Rendering of 1157 Main St., the first Class A office building within the 116-acre Northline mixed-use development in Leander, Texas. Image courtesy of St. John Properties

St. John Properties is expanding its presence in the Austin market with the construction of the first Class A office building in the 116-acre Northline mixed-use development in Leander, Texas, about 30 miles north of Austin.

The Baltimore-based privately held commercial real estate firm plans to break ground in early spring 2024 on the 120,000-square-foot building that will have three stories of office space above 15,500-square feet of ground-floor retail and restaurant space.

The building at 1157 Main St., which will also be the suburban city’s first Class A property, will have floorplates large enough to accommodate tenants that are diverse in size and services, including law firms, tech companies and business consultants. Suites will start at 2,000 square feet. Designed to earn LEED certification, the building will offer high-quality finishes and floor-to-ceiling windows. Completion is expected in the first half of 2025.

READ ALSO: Office Refinancings Remain a Tough Sell

Brooke Harlander, regional partner at St. John Properties, said in a prepared statement the project will meet the pent-up demand for office space in Leander, including small business owners who want to work close to home. Harlander said the Northline location will offer restaurant and retail options both in the building and nearby, as well as walkable amenities desired by employers and workers that are not always found in suburban office buildings.

The project team for the Northline office building includes Beck Design as the architect; Kimley-Horn as civil engineer; KW Landscape Architects for landscape work; WGI for MEP (mechanical, electrical and plumbing) design; and Dunaway for structural work.

Leander growth

Leander has experienced substantial residential growth over the last decade, fueling demand for commercial space among retailers and other businesses. The start of construction of the St. John Properties office building will mark a milestone for Northline, a development slated to be Leander’s new downtown district with more than 5 million square feet of office, retail, residential, hotel and civic space along with a signature park.

Alex Tynberg, principal at Northline Leander Development Co., said in prepared remarks the office building will be the first big step in diversifying and enhancing commercial space at Northline, where residents are scheduled to begin moving into the first apartments and townhomes later this year.

Randall Malik, director of economic development for the City of Leander, stated the office project will also enhance the city’s ability to bring primary employers to the community. Malik noted that many companies have tight timelines for relocation so the presence of move-in ready office space positions Leander as an attractive destination for new businesses.

Austin market expansion

Founded in 1971, St. John Properties owns assets valued at more than $5 billion across 11 states and has developed more than 23 million square feet of commercial space. The firm opened a Texas regional office in Austin in 2022, which Harlander leads.

In April, the company acquired a 35-acre property in Georgetown, Texas, another Austin suburb, to develop a 225,000-square-foot mixed-use business campus called Westinghouse Crossing. Plans call for the developer to break ground this fall on the project, with the delivery of the first building slated for the summer of 2024. St. John Properties will construct more than 170,000 square feet of flex R&D space, as well as more than 40,000 square feet of single-story office space and nearly 15,000 square feet of retail space, on a speculative basis. The firm expects to lease or sell about 1.4 acres for possible use as a restaurant or health-care facility.

The post St. John Properties to Build 120 KSF Project Near Austin appeared first on Commercial Property Executive.

Manifest Commerce signed a full-building lease, bringing the project’s first phase to 100 percent occupancy. Image courtesy of Stream Realty Partners

Greystar Real Estate Partners has commenced construction on the second and last phase of Whisper 35, a five-building industrial development in San Marcos, Texas. This phase is set to encompass 314,938 square feet, with completion scheduled for early 2024.

The news comes on the heels of Manifest Commerce’s signing a full-building lease for a 89,988-square-foot facility that was built during the first phase of the development. With this lease, both buildings in Phase I are now fully occupied.

RC Page is the co-general contractor for the project, while Stream Realty Partners is providing leasing and management services through Managing Director & Partner Sam Owen, Senior Vice Presidents Adam Green and Mitchell Becker, all based in Austin, Texas.

READ ALSO: Construction Spending Booms Across the Board

Whisper 35 is a 494,926-square-foot Class A industrial project developed in two phases. Phase I encompasses a total of 179,988 square feet, while the second phase is set to include three buildings:

• the 82,077-square-foot Building 3, with 177 parking spots;
• the 115,080-square-foot Building 4, with 215 parking spots;
• the 117,919-square-foot Building 5, with 257 parking spots.

All buildings in the park will feature grade level doors, dock-high doors and 24- to 32-foot clear heights.

The project’s first phase was financed through an $18.8 million construction loan originated by Synovus Bank, while Great Southern Bank provided $21.3 million in financing for Phase II, CommercialEdge data shows.

Between Austin and San Antonio

Whisper 35 is rising on 44 acres within Texas’ Innovation Corridor, close to Interstate 35, some 26 miles from Austin and within 56 miles of San Antonio. Additionally, the industrial development is 30 miles from Tesla’s giga factory and within 10 miles of two Amazon distribution centers in the area.

San Marcos has several sizable developments in the pipeline. One of the largest projects in the city is AXIS Logistics Park, a 2,000-acre master-planned industrial development that will have direct access to Loop 110 and other state highways. When completed, Scarborough Lane Development and Partners Real Estate’s megaproject is expected to become one of the largest industrial parks in the country.

The post Greystar Kicks Off Phase 2 of Austin-Area Industrial Project appeared first on Commercial Property Executive.

Casis Village traded for the first time in its history. Image courtesy of Ivy Cos.

A joint venture between Ivy Cos. and 35 South Capital has acquired Casis Village, a 48,500-square-foot retail center in Tarrytown, Texas. The asset was built by the Bryant family in 1952 and changed hands for the first time in its history. Endeavor Real Estate Group’s Principal Dan Frey worked on behalf the seller in the transaction, while the buyer was represented in-house.

The Randalls-anchored store is one of the few retail centers serving Tarrytown and the surrounding West Austin neighborhoods. Casis Village is home to various local tenants including Tarrytown Pharmacy, Estilo Boutique, Food Food and L Majors Jewelers, as well as to national companies such as Benchmark Bank and Starbucks.

The new owners plan to renovate the facade, landscaping and common areas of the retail center that was fully leased at the time of closing. RUE Realty will handle the property’s future leasing arrangements.

Located at 2727 Exposition Blvd. in the West Central submarket, Casis Village is in the 78703 ZIP code, which ranked the 10th wealthiest in Austin, based on a 2021 median household income of more than $125,000. Downtown Austin is roughly 4 miles southeast.

After a strong first quarter, the Austin retail market showed further signs of growth in Q2 2023, according to a CBRE report. Vacancy decreased by 30 basis points over the quarter to 2.8 percent, while more than 500,000 square feet of new space entered the metro’s inventory. The West Central’s vacancy rate was at 6.9 percent.

The post 70-Year Old Austin Retail Asset Changes Hands for the 1st Time appeared first on Commercial Property Executive.

CIM Group has sold Fifth + Tillery, a creative office building near downtown Austin, Texas. Image courtesy of CIM Group

CIM Group has sold Fifth + Tillery, a creative office building near downtown Austin, Texas, to the metro’s public transportation provider. Capital Metro acquired the property for nearly $87 million, according to the Austin American-Statesman.

The three-story office building totals 182,700 square feet, with floors ranging from 57,544 square feet to 65,588 square feet. Fifth + Tillery can accommodate tenants with flexible floorplates starting at 10,000 square feet, with each floor being accessible from outdoor walkways and ground-level parking.

The office building also features a 600 kW solar array, outdoor walk-up access, open-air walkways, outdoor spaces, private balconies and approximately 500 parking spaces. Located at 618 Tillery St. in East Austin, the property is more than 3 miles from the city’s downtown area.

READ ALSO: Evolving Workspaces

CIM Group acquired Fifth + Tillery in October 2019, along with two other buildings in the Austin area. According to CommercialEdge data, Comerica Bank provided a nearly $36 million loan to CIM Group for the creative office property. While the original building was developed in 1973 as a warehouse, the new owner’s plans were to convert the structure into the creative office configuration that exists today. CIM Group tapped Gensler to design the redevelopment, which was completed in 2020.

Strong Austin office presence

Apart from Fifth + Tillery, CIM Group recently sold Hartland Plaza, another Austin office building. Despite the two recent sales, the company plans to expand its footprint in the metro.

CIM Group’s portfolio in the Austin market includes major properties like Eastside Village, Chase Tower, 507 Calles, 1300 E. 5th St. and 1021 E. 7th St. The company has been developing another adaptive reuse project in the city, called Penn Field, completing the first building in mid-2020.

The post CIM Group Sells Austin Creative Office Building appeared first on Commercial Property Executive.

Domain Northside. Image courtesy of CommercialEdge

Northwood Retail intends to build a 1 million-square-foot office project as part of a shopping center in Austin, Texas, that’s adapting toward office space. The developer, along with Endeavor Real Estate Group and Simon Property Group, has submitted construction filings, which is currently called Domain Block C Office.

According to public documents, the team plans to demolish an existing parking garage to make way for the new office building. Boka Powell was tapped as the project’s architect and Kimley-Horn as the landscape architect.

READ ALSO: The Big City Rebound and Its CRE Implications

The tower is set to rise 307 feet tall over 24 floors, according to the filings, on a 5.1-acre site that’s bordered by Rock Rose Avenue and Palm Way. Tenants will be located within the Domain Northside development that’s home to major retailers such as Apple, Sephora and Nordstrom, as well as several restaurant options.

A Northwood spokesperson told Commercial Property Executive that the company is in the preliminary planning stages for its office tower that will have 400,000 square feet of office space and a 600,000-square-foot garage

Adding office space into the mix

While The Domain was originally built as a retail-centric destination, it has been welcoming office buildings into its space for the past few years. Northwood Retail, who was one of the original developers of The Domain, is mostly known for retail projects. However, the firm built The Domain Northside, a mixed-use development that includes 633,000 square feet of retail space, 125,000 square feet of office space, 563 multifamily units and a 171-key hotel.

Developers have been active in The Domain submarket recently, despite the volatile economic landscape. In March, Kilroy Realty acquired a 2.9-acre site for a 19-story office tower that’s expected to deliver in 2024. Two months later, Hines secured a 320,000-square-foot lease from IBM Corp. for its twin, 14-story office building project, which is currently under construction.

The post Austin to Get 1 MSF Office Project appeared first on Commercial Property Executive.

7901 Metropolis Drive. Image courtesy of CBRE

Boyd Watterson Asset Management has acquired a 272,636-square-foot outpatient clinic in Austin, Texas, CommercialEdge data shows. Healthcare Property Advisors sold the asset for $142 million and was represented by CBRE in the transaction. U.S. Department of Veterans Affairs is operating the property.

According to CommercialEdge, the facility last traded in 2016, when Healthcare Property Advisors purchased the clinic from Cullinan Properties with the help of a $121.5 million acquisition loan by Wells Fargo Bank.

The Class A building rises two stories on 35 acres and came online in 2013. The property features 138,000-square-foot floorplates, five passenger elevators, controlled access and offers 1,238 parking spaces.

At the time of its construction, the facility was the largest freestanding medical clinic serving veterans in the metro. The clinic provides medical services such as physical therapy, radiation treatments, prosthetic replacements, cardiology, neurology and mental health counseling.

Located at 7901 Metropolis Drive, the property is near the Austin-Bergstrom International Airport and 7 miles southeast of downtown Austin. Other medical providers in the surrounding area include D&A Medical Center in Austin, Nova Medical Centers, Next Door Health and Central Texas Allied Health Institute.

The CBRE team representing the seller included Vice Chairman and Managing Director Will Pike, Vice Chairman Lee Asher, Executive Vice President Brian Pfohl, Investment Sales Director Cyrus Felfeli and First Vice President Jordan Selbiger.

Over a 12-month period ending in July, 10 medical office buildings changed hands in the Austin market, totaling 421,773 square feet, CommercialEdge data shows.

The post Austin VA Clinic Trades for $142M appeared first on Commercial Property Executive.

Image by RoschetzkyIstockPhoto/iStockphoto.com

As of April, Austin’s office market had 5.9 million square feet underway, representing 6.7 percent of total stock, according to CommercialEdge data. Since the end of 2022, the Texas capital’s under-construction pipeline shrank by 1.7 million square feet, while on a year-over-year it was nearly cut in half, decreasing from the 10.3 million square feet registered back in April 2022.

The metro still leads the nation when it comes to office development on a percentage-of-stock basis. Planned and under construction projects represented a whopping 24.7 percent of total inventory, trailed by Nashville (13.6 percent), Seattle (13.0 percent) and San Francisco (13.0 percent).

The two largest office projects under construction as of April broke ground last year. Lincoln Property Co., Phoenix Property Co. and DivcoWest are constructing The Republic, a 48-story, 833,000-square-foot tower in downtown Austin.

Additionally, Lincoln Property Co. and Kairoi Residential are constructing Waterline, the second-biggest office building underway in the metro. Upon completion, the 74-story high-rise is set to become the tallest tower in the city. The 74-story skyscraper is slated to encompass 700,000 square feet of office space, a 251-key 1 Hotel Austin, ground-level retail and dining, as well as 352 residential units.

Companies expand in the Texas capital

Defying ongoing tech setbacks, in the beginning of 2023 Apple moved forward on the second phase of its $1 billion Parmer Lane campus. The tech giant completed the first phase of the 133-acre, 12-building project in 2022.

Westinghouse Crossing. Rendering courtesy of St. John Properties

In April, St. John Properties entered the Austin market with the purchase of a 35-acre property in Georgetown, Texas. The company is planning to develop a mixed-use project on a speculative basis, to comprise 170,000 square feet of flex R&D space, more than 40,000 square feet of office space and nearly 15,000 square feet of retail space.

Also in April, California-based Redcar closed on Redcar Fund II with $418 million in equity commitments, marking its expansion in Austin. The privately held real estate investment company invests in urban commercial real estate and converts underperforming industrial properties into creative office assets.

Nationwide, Austin had the biggest year-over-year spike in office vacancy through April, rising 590 basis points and hitting 22.0 percent. Most similar-growth Sun Belt peer markets saw a decrease of their vacancy rates since the same period in 2022, including Charlotte (-270 basis points), Nashville (-60 basis points) and Houston (-330 basis points), while Phoenix‘s rate grew by 320 basis points.

Transaction volume shrinks, prices down

Year-to-date through April, Austin’s office market saw the transaction of assets worth roughly $183 million, with 19 properties sold since the beginning of the year. Prices averaged at $224.8 per square foot, down from last year’s average of $271 per square foot for this period. Deal volume was also lower than in the same period in 2022, when office transactions amounted to $237 million.

Hartland Plaza. Image courtesy of CIM Group

In February, CIM Group sold Hartland Plaza, a 184,128-square-foot, Class A asset in downtown Austin, marking one of the largest transactions this year. The seller plans to acquire additional properties in the metro, Shaul Kuba, co-founder & principal of the firm, said in a prepared statement.

MIG Real Estate closed the $102 million purchase of Braker Metric Business Park, a 545,000-square-foot, Class B office development comprising a total of 13 buildings. World Class Capital Group was the seller of the North Austin asset.

Austin’s coworking hub

Expansive Austin Highland. Image courtesy of Expansive

As of April, the Austin market comprised roughly 1.7 million square feet of coworking space, representing 1.8 percent of total rentable office space and slightly higher than the national average of 1.7 percent that month. Nashville (2.5 percent) and Atlanta (2.1 percent) led the list of Sun Belt peer markets with most shared space relative to total leasable stock.

Regus and WeWork dominated the city’s flex office inventory, with numerous locations spread throughout the metro. In May, Expansive announced the imminent opening of Expansive Austin Highland, a 48,000-square-foot coworking location. The company picked up the 53,415-square-foot building last year, for $10.4 million. The five-story property underwent a multimillion-dollar renovation plan prior to its opening in May 2023.

The post Austin’s Office Vacancy Increases Sharply appeared first on Commercial Property Executive.

Aerial view of the project’s first phase. Image courtesy of Lane Development and Partners Real Estate

Scarborough Lane Development and Partners Real Estate have taken another step toward the groundbreaking of a 2,000-acre industrial project in San Marcos, Texas. AXIS Logistics Park, formerly known as the SMART Terminal, is set to become one of the largest master-planned industrial properties in the U.S.

Scarborough Lane recently filed a request with the City of San Marcos for the annexation of 620 acres that are currently outside its limits. Council members gave their initial approval, with the definitive decision expected by May 16.

Another request involved the rezoning of the property for heavy industrial use; the council will decide on the matter on July 3. Approximately 735 acres at the Caldwell County site are already zoned for industrial use.

An industrial mega-development in the Texas Triangle

Scarborough Lane, which is also the general manager for AXIS Logistics Park, purchased the site in the third quarter of 2021. The project has been in the making since at least 2018, according to Community Impact.

Slated to come online in three phases, with the first comprising some 850 acres, AXIS will encompass both speculative and build-to-suit facilities. The Class A development is slated to serve as a regional distribution hub for retailers, suppliers and manufacturers and plans include water and wastewater infrastructure and a 600 MW electrical substation with a 356 kV transmission line.

READ ALSO: Industrial Sector Fundamentals Remain Solid

The co-developers are working with the San Marcos and Caldwell County governments to market space at the park to national and international industrial tenants. John Colglazier, Gray Gilbert, Chris Haro, Kyle Kennan and John Simons of Partners Real Estate are the lead brokers for the project.

The site is within the Texas Triangle, a megaregion encompassing the Austin, Dallas-Fort Worth, Houston and San Antonio metropolitan areas. The project offers direct access to Loop 110, as well as easy access to interstates 35 and 10, as well as to Texas State Highway 130. Union Pacific Railway, the BNSF Railway and San Marcos Regional Airport are near, offering potential rail and shipping capabilities.

San Marcos’ industrial pipeline

San Marcos had only about 100,000 square feet of industrial space under construction as of May, according to CommercialEdge data. However, its planned and prospective projects pipeline amounted to more than 3.6 million square feet.

One of the planned projects involves the construction of a three-building industrial property set to total 663,460 square feet. Ledo Capital Group and St. Clair Commercial Real Estate recently acquired 45.7 acres for its development.

Another significant project is a media park totaling 820,000 square feet, being developed by Hill Country Group. Upon completion, the campus is expected to become the state’s largest virtual production, TV, film and streaming studio.

The post 2,000-Acre Industrial Project Moves Forward Near Austin appeared first on Commercial Property Executive.

Hines Domain Northside. Image courtesy of Hines

IBM Corp. has leased 320,000 square feet at two upcoming office towers to rise in The Domain in Austin, Texas, developer Hines confirmed for Commercial Property Executive. The twin, 14-story office buildings will total 500,000 square feet; IBM will be taking all the space in one tower and two floors in the second.

The firm currently leases about 800,000 square feet of space in two locations elsewhere in The Domain for its 6,000 employees. Company officials said that staying in the area was important because it is close to existing business partners as well as stores, restaurants and Q2 Stadium. The move to the new Hines development, which will be known as Hines Domain Northside, will enable IBM to consolidate its Austin teams in one location.

READ ALSO: Top 10 Markets for Office Deliveries in 2022

Hines Domain Northside will take shape at 11901 N. MoPac Expressway, the site of a former LaQuinta Inn and Suites. Construction is expected to begin later this year and be completed by 2027. The development team also includes Munoz + Albin as design architect, Kirksey as the architect of record, Kimley-Horn as civil engineer and Dunaway as structural engineer.

New tenant, new plans

Hines had acquired the 4.3-acre property in The Domain, a live-work-play community on the city’s northwest side that is considered Austin’s second downtown, last summer. Initial plans called for up to 320 residential units along with office space in one 15-story tower.

A Hines spokesperson told CPE the firm changed its plans for the property in response to the IBM lease. The corporation had released a request for proposals for a new office hub in Austin in September, according to the Austin Business Journal. IBM Senior Vice President Joanne Wright reportedly said the company liked the Hines plan because of its focus on sustainability and clear vision for what the office of the future will be in the post-pandemic work world.

In fact, Austin is not the only major market where IBM has committed to large office leases. In March 2022, IBM signed a 328,000-square-foot, 16-year lease at One Madison Avenue, a 1.4 million-square-foot tower redevelopment and extension in Manhattan’s Midtown South submarket owned by SL Green Realty Corp. and several joint venture partners including Hines.

Focus on sustainability

The Hines Domain Northside buildings will have separate cores and lobbies but share an eight-story podium parking garage. The project, described as a next-generation, highly amenitized office development, will be seeking LEED Gold certification, WELL Platinum, WiredScore Platinum and Austin Energy Green Building Two-Star designations.

Hines is known for its sustainable developments, particularly the T3 product that combines the advantages of timber, new technological innovations and transit benefits. The company’s T3 portfolio encompasses 26 assets, including T3 Eastside, a Class A office project under construction in Austin’s East submarket.

The post IBM Leases 320 KSF at Austin Twin Office Buildings appeared first on Commercial Property Executive.

Redeveloped 1501 Broadway, Santa Monica, Calif. Image courtesy of Redcar

Redcar, a Santa Monica, Calif.,-based privately held real estate investment company that invests in urban commercial real estate and converts underperforming industrial properties into creative office assets, has closed on Redcar Fund II with $418 million in equity commitments.

Fund II and a co-investment sidecar that will help capitalize the firm’s expansion into Austin, Texas, include investments from endowments, asset managers, private pensions, public pensions, family offices, insurance companies, financial institutions, foundations, wealth managers and high net worth individuals in North America, the Middle East and Europe.

The fund exceeded the size of Redcar’s $412 million Fund I amid a challenging fundraising environment, especially for U.S. office managers, Christopher Chee, co-managing partner, said in a prepared statement. Chee said the firm’s investment strategy includes targeted locations, a unique product type and cautious capital structures that attract continued interest and support from both new and existing investors.

READ ALSO: Office Owners Face Financing Dilemma

Fund II currently owns a portfolio of 12 assets across Los Angeles and in Austin’s St. Elmo and South Austin neighborhoods. The firm invests in key high-growth submarkets through funds, joint ventures and co-investments.

Evercore Group LLC acted as global capital advisor and Kirkland & Ellis LLP acted as legal advisor for Redcar Fund II and the co-investment vehicle.

Building Redcar

Redcar said Fund I focused exclusively on Los Angeles in high submarkets such as Culver City, Santa Monica, Silver Lake, Frogtown and Chinatown, which are being driven by the expansion of content creation studios, gaming, music, fashion and media companies like Amazon Studios, HBO and Apple. Redcar’s properties in these niche markets have had consistent and strong leasing demand.

Jim Jacobsen, Redcar founder & co-managing partner, said in prepared remarks that since the onset of the COVID-19 pandemic, tenants have been seeking high-quality office space filled with light and air, well-conceived outdoor areas and detailed design.

Co-Managing Partner Vince Korth said in a prepared statement Redcar has been growing since its inception in 2011 and now has 45 employees across design, construction, investments, leasing/marketing, property management and accounting. Korth said the firm has also been cultivating a group of architects since its founding including Olson Kundig, Selldorf Architects, LEVER, Allied Works, HGA and Breland-Harper.

The firm’s projects include the installation of a solar rooftop at 2341 Michigan Ave., which was the largest solar project in Santa Monica in 2019. Also in Santa Monica, Redcar converted a former industrial paint store at 1501 Broadway into a two-story building with about 11,000 square feet of office and retail space in 2020.

Other projects include development of a 25,450-square-foot creative office building in Culver City that was completed in June 2021 and a 127,000-square-foot retail and office building at 843 N. Spring St. in East Los Angeles that broke ground in the second quarter of 2021. It was among the first office buildings in Los Angeles to have a cross-laminated timber floor system.

The post Redcar Closes $418M Creative Office Fund appeared first on Commercial Property Executive.

130 Crossing Phase 3 rendering. Image courtesy of Ironwood Realty Partners LLC

Ironwood Realty Partners LLC has broken ground on the final phase of 130 Crossing Industrial Park in Pflugerville, Texas. Construction is scheduled for completion in late 2023.

Alliance Architects, Catamount Constructors, Reed Engineering, Bella Firma, Stream Realty Partners and Pacheco Koch are Ironwood’s project partners. Ironwood’s Senior Development Manager Parker Rice will oversee the development of the final phase. The company has also been working with the Pflugerville Community Development Corp.

Ironwood and co-developer Affinius Capital, formerly USAA Real Estate, have acquired the development site back in 2020. Following the completion of the third phase, the Class A industrial park will comprise more than 1 million square feet.

The third and last phase of 130 Crossing will total approximately 490,000 square feet and will include the construction of three new buildings. The two existing phases of the industrial development total 675,000 square feet and feature five buildings, including a 113,000-square-foot warehouse now owned by Wisenbaker Builder Services, CSW Development’s 52,000-square-foot medical office building and approximately 340,000 square feet of warehouse space leased to a major Austin employer.

The Class A industrial park is located at the intersection of State Highway 130 and Pecan Street, in northeast Austin. Lake Pflugerville Park and Austin Executive Airport are within 2.5 miles from the project’s development site.

The post Ironwood Breaks Ground on Phase 3 of Austin Industrial Park appeared first on Commercial Property Executive.

San Marcos Business Park. Rendering courtesy of Stream Realty Partners

Ledo Capital Group and its joint venture partner St. Clair Commercial Real Estate have acquired 45.67 acres of industrial-zoned land in the Whisper South master-planned area of San Marcos, Texas.

At the site, the developers are planning the construction of San Marcos Business Park, a three-building industrial park totaling 663,460 square feet. The partners purchased the lot in a transaction brokered by Stream Realty Partners. The project will break ground in the fourth quarter of this year.

Project details

For the construction of the San Marcos Business Park, the developers are working with ARCO/Murray Design Build, which will provide architectural and contracting services. Kimley-Horn will assist with the project’s civil engineering. Upon completion, Stream will also market the facilities for ownership, leasing or build-to-suit uses.

READ ALSO: Industrial Subleasing Strategies

At full build-out, the San Marcos Business Park will consist of three distinct facilities. All three assets will have rear-load capabilities, 32- to 36-foot clear heights and ESFR fire sprinkler systems. The buildings will share secured truck court that includes space for outdoor and trailer storage, as well as heavy parking.

The properties’ specifics:

• Building A is a 204,460-square-foot, multi-tenant capable facility that directly faces Interstate 35
• Building B is an 84,000-square-foot free-standing building
• Building C, the largest in the park, is a 375,000-square-foot property with multi-tenant divisibility

With direct access to the Interstate-35, the Texas industrial campus will be located between Austin and San Antonio, 27 miles from the former and 45 miles from the latter. Additionally, the facility is within a day’s drive of Houston and Dallas.

Stream Realty Partners Senior Vice Presidents Kevin Cosgrove and Payton Rion brokered the transaction. Cosgrove, alongside Senior Vice President Adam Green will market the facility. Paul Wagner, a principal at ARCO/Murray Design Build, will oversee the project’s planning.

Austin’s strong industrial market

After its construction finishes, the site will be the latest installment in the Whisper South master-planned development. In June of 2022, Greystar broke ground on the second building of Whisper 35, a five-building, 500,000-square-foot project.

Greater Austin’s industrial market is off the heels of another record-setting year, with 11.6 million square feet of space in its pipeline, and 1.3 million square feet of positive net absorption, according to data from a fourth quarter 2022 report from CBRE. The flurry of investment, leasing and development activity is due in part to a large-scale manufacturing interest taking place around the city, particularly for semiconductors and electric vehicles, as well as corporate relocations.

In February, Freehill Development Co. broke ground on a 176,546 square-foot industrial complex in Georgetown, Texas. The company has an additional 1.1 million square feet of space under construction in central Texas, including in San Marcos.

The post Ledo Capital JV to Develop Austin-Area Industrial Park appeared first on Commercial Property Executive.

Rendering of Hero Way West. Image courtesy of JLL

JLL Capital Markets has arranged joint venture equity and construction financing for Hero Way West, an industrial project in Leander, Texas, totaling 227,200 square feet of Class A space. The company worked on behalf of Freehill Development Co.

Hero Way West will be a three-building industrial development that will include 28-foot clear heights, ample parking spaces, dock-high rear loading capabilities and a visible showroom space. The buildings will cater to small businesses from Central Texas and will offer shallow-bay space starting from 8,000 square feet. Some 24,500 square feet of space is already preleased. The developer expects to deliver the project in the fourth quarter of 2024.

Shallow-bay products in Central Texas

Situated on a nearly 17-acre lot, along Hero Way, the project will be close to U.S. Route 183 and 11 miles from Interstate 35, providing easy access to Austin, San Antonio and Dallas, while being 16 miles from Georgetown, Texas, 19 miles of Round Rock, Texas, and within 37 miles of Austin-Bergstrom International Airport.

Hero Way West is one of the five industrial projects announced by the developer, part of a 1.1 million-square-foot development initiative that will take place around Austin, San Antonio, San Marcos and Dripping Springs submarkets of Texas. Earlier in February, Freehill Development Co. broke ground on the first project in its pipeline: 1310 Westinghouse Road in Georgetown, Texas, a 176,546-square-foot industrial project.

The JLL Capital Markets team of Senior Director Charlie Strauss, Senior Managing Director Trent Agnew and Directors Tom Weber and Josh Villarreal worked on behalf of the developer to arrange the joint venture equity, while Managing Directors Chris McColpin and Michael Johnson secured the floating-rate construction financing.

Earlier this year, Prologis Inc. announced its plans to develop a 629,000-square-foot logistics project in Cedar Park, Texas, a suburb of Austin. The industrial campus will rise on a 75-acre site and will be composed of five buildings, with delivery expected in early 2024.

The post Freehill Moves Forward With Greater Austin Project appeared first on Commercial Property Executive.

Rendering of the Westinghouse Crossing project in Georgetown, Texas. Rendering courtesy of St. John Properties

St. John Properties has entered the Austin market, acquiring a 35-acre property for the speculative development of a 225,000-square-foot mixed-use business campus. The site, located in Georgetown, Texas, will include flex research and development, office and retail components.

Aquila Commercial Senior Vice President Joe Simmons and Principal Leigh Ellis brokered the deal on behalf of the seller, Bourn Cos. The developer plans to break ground on the project this fall, with the delivery of the first building slated for the summer of 2024.

READ ALSO: What’s Fueling Austin’s Large Office Pipeline

St. John Properties plans to construct over 170,000 square feet of flex R&D space, as well as more than 40,000 square feet of single-story office space and nearly 15,000 square feet of retail space, on a speculative basis. Additionally, 1.4 acres at the property will be available for lease or purchase and can be used for a stand-alone restaurant or a health-care facility.

Westinghouse Crossing is set to encompass four flex buildings, two office buildings and a retail strip at full build-out, according to the developer’s website.

The project, Westinghouse Crossing, is located 15 miles north of Austin, Texas, near the southern border of Georgetown and the northern border of Round Rock, Texas. Adjacent to Interstate 35, Highway 130 and Farm to Market Road 1431, the development site is near the intersection of Westinghouse Road and North Mays Street.

The project is situated in close proximity to Round Rock Premium Outlets, Baylor Scott & White Hospital and the Great Hall & Conference Center. The immediate area accommodates a workforce of more than 700,000, as well as nearly 2,600 apartment homes either under construction or recently completed.

Over the past four years, St. John Properties has speculatively broken ground on almost 1 million square feet of space across the U.S. and intends to continue pursing this strategy. Including its Austin projects, the company plans to double its portfolio to 40 million square feet.

Metro Austin, a favorite among developers

With a population of more than 1 million residents, Austin is the 10th-largest city in the U.S., according to data from the U.S. Census Bureau. The city has a higher percentage of its population in the “peak working years” age group at 43 percent, compared to the national average of 36 percent.

Housing in the area increased by 26 percent since 2010, and Austin’s gross domestic product grew by 4.3 percent through the third quarter of 2022.

Metro Austin is recording a rapid increase in the number of new office projects, with more than 6.6 million square feet under construction, constituting 7.5 percent of total inventory, the latest CommercialEdge report reveals. The metro’s inventory marks the highest proportion of upcoming office space in the country.

Earlier this year, Jackson-Shaw also announced plans for an Austin business park, ATX 130, encompassing approximately 602,400 square feet of office, warehouse and distribution space. The developer broke ground on the project last month.

The post St. John Properties to Develop 225 KSF Austin-Area Campus appeared first on Commercial Property Executive.

Expansive Austin Highland. Image courtesy of Expansive

Expansive is set to open Expansive Austin Highland, a 48,000-square-foot coworking property in central Austin, Texas. The company paid $14.9 million for the 53,415-square-foot office building in March 2022, after landing a $10.4 million loan from Texas Security Bank, Commercial Edge data shows. Scheduled to open next month, the building has undergone a multimillion-dollar renovation plan.

Completed in 1978, the five-floor property comprises open coworking spaces, dedicated desks, private offices, suites for smaller and larger teams of up to 500 members and on-demand training and meeting rooms. Amenities include two phone booths, a community library, an outdoor patio, a shared kitchen and an outdoor penthouse community lounge. The indoor-outdoor lounge also doubles as an event venue.

Located at 305 E. Huntland Drive, the property is less than half a mile from Interstate 35 and within a mile of Highway 209. Austin city center is some 5.3 miles south of the property. Several dining, retail and entertainment options are within walking distance of Expansive Austin Highland.

The company is rapidly expanding its footprint across Texas, marking the firm’s sixth location in the state and the second in the metro. Expansive also owns and operates another location at 14205 N. Mopac Expressway in North Austin. The flex office provider is bolstering its portfolio in other states as well: in December the company opened Expansive Mesa at Newberry Station, a 20,000-square-foot coworking space in Mesa, Ariz.

The post Expansive to Open 48 KSF Austin Coworking Location appeared first on Commercial Property Executive.

Image by Dmitry Steshenko via Pixabay.com

Attracting ongoing widespread government and private sector investment, semiconductor fabrication plants and manufacturing facilities have become one of the largest contributors to industrial real estate development and related investment activity nationwide.

Critical technologies using semiconductor materials play a vital role in modern economies, from smartphones to vehicles or medical devices. Over the past three years, 40 new semiconductor development projects have been announced, along with $200 billion in private investments across 16 states to increase manufacturing capacity, according to a report from the Semiconductor Industry Association. The industry has already attracted investments and large-scale development projects from Samsung, Micron Technology Inc., Intel, Taiwan Semiconductor Manufacturing Co. and Tesla in some of the nation’s largest industrial markets.

Of late, the most notable developments have been the Biden Administration’s passage of the CHIPS and Science Act, which allocates $280 billion over the next decade to the domestic production of semiconductors, including $52 billion to research and development. To date, the legislation is the largest government effort as part of a re-shoring of the nation’s related industry amid ongoing geopolitical instability and latent supply chain hiccups.

In 2021, the U.S. accounted for 34 percent of semiconductor demand, while producing 14 percent of the world’s supply, data from a January 2023 report from McKinsey and Co. shows. At present, the nation manufactures 12 percent of the global total, down more than threefold from three decades ago, the same data shows. At the same time, the most advanced chips, those less than 10 nanometers in thickness, with specific applications to smartphones and cars, are produced entirely in East Asia, the same data shows.

Manufacturing motivation

Ermengarde Jabir, senior economist at Moody’s Analytics, sees the volume of domestic and foreign investment as partly preventative measures, citing the slowdown in global supply chains brought by pandemic-era ripple effects as causing the highest inflation in four decades.

“These conditions have only served to accelerate the push for near- (and long-term) reshoring, but the main concern definitely revolves around avoiding future supply chain pressures,” Jabir told Commercial Property Executive.

Jason Tolliver, executive managing director and co-lead of Americas Logistics & Industrial Services at Cushman & Wakefield, attributes this large scale demand for manufacturing capabilities to congressional concern over the historic “fabless” model, one where “semiconductor and related firms focus on R&D and design capabilities, while contracting with outside, mostly foreign, fabrication companies.” The fabrication plants have a host of vulnerabilities towards disruption, including trade disputes and potential military conflict, according to Tolliver.

Additionally, export controls, such as those recently announced by the U.S. Commerce Department that have targeted and restricted the semiconductor industries in China, have made a reliance on foreign manufacturing all the more difficult.

According to Seth Martindale, senior managing director of Americas consulting at CBRE, the restrictions “likely add to the list of potential issues to take into consideration when manufacturing abroad to serve a U.S. customer.” Consequently, the risks of continuing to rely on manufacturing abroad to save on costs will far outweigh the benefits. “Companies will find it harder to justify the savings associated with manufacturing abroad when the operational risks have substantially increased,” Martindale added.

In line with these trends, much recent investment has been directed toward manufacturing facilities where the myriad specialized equipment and tools for semiconductors are made. Such projects significantly reduce the industry’s reliance on an international web of equipment and materials, something fractured by both pandemic-era supply chain slowdowns and the ongoing conflict in Ukraine, which has created major price hikes of neon gas, a necessary component of the specialized lasers that are used to etch circuits into silicon wafers. Indeed, 22 of 40 ongoing developments are devoted to materials, SIA statistics show.

Rendering of a $100 billion semiconductor manufacturing plant being built in Syracuse, N.Y. The facility is part of a larger investment in semiconductor fabrication-related industrial real estate across upstate New York. Image courtesy of Micron Technology

A recent high-profile project that reflects this trend includes the $319 million project on the part of Edwards Vacuum, a British manufacturer of vacuum and abatement equipment that creates the sterile conditions necessary for semiconductor fabrication. The company is set to build a 240,000-square-foot facility in the Upstate New York Science & Technology Advanced Manufacturing Park, where it will produce its dry pumps that are used in many fabrication plants.

Investing in innovation

However, merely preventing shortages of the type seen during the pandemic is only part of the task at hand. The sector must remain competitive and innovative to be viable, according to Jabir. For this, Jabir has singled out “sustainability and automation” as the areas with the potential for most growth, those such as electric vehicles and artificial intelligence. Where sustainability is concerned, the CHIPS and Science Act, in particular, is likely to contribute further to these goals, with the provision of $67 billion toward zero-carbon technologies, and their associated research and development.

The push for innovation both benefits local economies and the capabilities of existing industrial real estate projects due to semiconductors requiring precisely engineered equipment and distinct building specifications. “(It) can become very useful in this aspect, as the industrial sector continues to thrive, and developers/landlords are willing to build out specialized infrastructure in warehouses to meet tenant manufacturing needs,” Jabir added.

Additionally, the legislation will have the effect of easing concerns on part of investors who may otherwise have been more reluctant to allocate capital to the developments, particularly in the current economic environment. “The additional Federal funds make it easier for companies that had been uncertain about investing to decide to actually move forward…,” Martindale said.

Beyond investment, both new facilities and their associated investments will also have more immediate, material benefits, through acts such as their construction and infrastructure improvements. Long-term, Meredith O’Connor, international director at JLL, anticipates the new public and private investment as incentives that “will secure domestic supply, create tens of thousands of good-paying construction jobs and thousands more high-skilled manufacturing jobs and catalyze hundreds of billions more in private investment.”

Semiconductor capitals?

Despite the broad number and scope of projects taking place across the nation, two cities in particular stand out as emerging hubs of the domestic semiconductor industry: Phoenix and Austin, Texas.

Map of all semiconductor-related industrial projects from around Phoenix. Image courtesy of the Greater Phoenix Economic Council

Metro Phoenix, whose semiconductor sector emerged in 1979 with the establishment of Intel in the city of Chandler, has seen large-scale investment from the company, as well as from TSMC, in a series of developments projected to cost $20 billion and $40 billion, respectively.

These developments are dedicated to the manufacturing of chips measuring four to five nanometers in thickness. At present, the metro is home to 14 ongoing developments, consisting of the above fabrication facilities, as well as 10 materials processing plants, and two equipment manufacturing centers, the SIA data shows.

Samsung Semiconductor Facility in Austin, Texas. Image courtesy of Samsung

Austin, with access to one of the nation’s largest university systems, has seen the development of a $17 billion fabrication plant from Samsung, alongside other fabrication plants from Texas Instruments and NXP, according to SIA information. O’Connor attributes these developments to “a highly trained workforce and partnerships between the region’s higher education institutions and the private sector.”

READ ALSO: Can Phoenix Become America’s Semiconductor Capital?

Rusty Kennedy, managing director and leader of Stream Realty Partners’ Phoenix office, oversees industrial services delivery in the region. He attests to the area’s strength as a hub of investment and development for the sector.

Kennedy cited the city’s population growth, educated workforce, access to cheap energy and isolation from natural disasters as making it a desirable option for chip plant construction. Equally important, however, is the city’s “business-friendly and business-focused” culture, one that Kennedy sees as being spurred by “tremendous interaction and collaboration between the business community and the government.”

In turn, the projects create centers of innovation through not only their associated labor and infrastructure requirements, but through their other contributions to the city’s commercial sector as a whole by way of the development of related material suppliers.

“What is great about the ability to attract semiconductor-focused companies and manufacturers, in general, is these companies not only bring large investments and great jobs to the Valley, but they all typically drive ancillary business as well,” he added. Kennedy also observes and anticipates more foreign investment, cementing the city as a “very powerful and stable ecosystem of innovation and employment.”

The post Semiconductor Boom Continues to Boost CRE appeared first on Commercial Property Executive.

Key takeaways:

• In 2022 Austin remained the nation’s leading market for development, with its under-construction office pipeline accounting for 7.2 percent of the metro’s total stock.
• Google and Apple are among the top tech players that delivered large projects in the metro last year.
• While sales volume was low, Austin was the priciest Sun Belt office market in 2022.
  

  ---

Austin was a magnet for investors in recent years and continued its rapid expansion in 2022. Since the start of 2021, the Texas capital added 59,000 office jobs, marking an 18.0 percent growth. In 2022, the metro saw 5.7 million square feet in office starts, surpassing 2021 starts by 2 million square feet.

At the end of 2022, the metro had 7.6 million square feet of office space under construction, representing 7.2 percent of total stock, according to CommercialEdge data. The Texas capital maintained its leading position as the metro with the nation’s largest development pipeline relative to overall stock. Atlanta was inching up behind, with an under-construction supply accounting for 6.2 percent of total stock.

Amounting to 13.9 million square feet, Atlanta had the largest under-construction pipeline across Sun Belt markets, followed by Dallas (8.1 million square feet), Charlotte (4.0 million square feet), Nashville (3.2 million square feet) and Phoenix (1.5 million square feet).

READ ALSO: Sizing Up CRE Investment’s Plunge: CBRE

The Republic. Image courtesy of Neoscape

In the second quarter of last year, Lincoln Property Co., Phoenix Property Co. and DivcoWest commenced construction of The Republic, the biggest office project in the making in Austin. The 48-story will yield 833,000 square feet of office space in downtown Austin. In April, the developers secured the building’s first major tenant.

Another large-scale project that commenced construction in 2022 is Waterline, a 2.7 million-square-foot mixed-use development by Lincoln Property Co. and Kairoi Residential. Set to be the tallest tower in the city, the 74-story skyscraper is planned to encompass 700,000 square feet of office space, a 251-key 1 Hotel Austin, ground-level retail and dining, as well as 352 residential units on the top floors.

Some of Austin’s largest projects came online in 2022

In 2022, 4.3 million square feet of office space came online in the Texas capital, representing 4.1 percent of total office inventory. Austin had the largest completed office space stock among similar Sun Belt markets, followed by Dallas (3.0 million square feet) and Atlanta (2.3 million square feet).

Apple’s Austin campus. Image courtesy of Apple

As for large deliveries, Apple completed the first phase of its $1 billion Parmer Lane Campus during 2022. At full buildout, the project is planned to create 3 million square feet of space in 12 buildings. In January 2023, the company announced plans to start the project’s second phase at its 133-acre campus.

Trammell Crow and MSD Capital LP also completed the long-anticipated Google Tower, the city’s tallest office structure. The tech giant signed up for the entire 814,081-square-foot building back in 2019, around the time of the skyscraper’s groundbreaking. The 35-story high-rise was designed by Pelli Clarke Pelli Architects.

Austin’s vacancy larger than the national average

The metro’s vacancy rate hit 19.6 percent in December, lower than that of Atlanta (20.0 percent), but higher than in Charlotte (13.2 percent), Nashville (18.0 percent) and Dallas (18.5 percent). That same month, the national vacancy rate for offices averaged at 16.5 percent.

Indeed Tower. Image courtesy of CommercialEdge

In October, Kilroy Realty inked one of the biggest leases of the second half of the year at its Indeed Tower in Austin’s CBD. Design, architecture and engineering firm Page—which also acted as architect of the LEED Platinum-certified building—signed up for 51,000 square feet at the location.

With the flex sector riding a new wave of heightened demand, coworking spaces have been popping up across the U.S. In December 2022, Austin’s flexible office market had 70 locations registered by CommercialEdge, across roughly 1.1 million square feet and representing 1.8 percent of total rentable office space in the metro.

Sales volume low, but prices high

During 2022, Austin’s office market saw the trade of $1.15 billion worth of office product, comprising roughly 5.1 million square feet and 77 properties. Among peer markets, Atlanta ($2.86 billion) registered the largest sales volume last year, followed by Dallas ($2.24 billion) and Charlotte ($1.26 billion). The Texas capital’s average sale price was $358.3 per square feet, the highest across Sun Belt cities, followed by Charlotte ($285.5 per square feet), Nashville ($255.9 per square feet) and Phoenix ($253.6 per square feet).

The largest commercial deal of 2022 was the trade of Block 21. Ryman Hospitality Properties Inc. purchased the 476,150-square-foot mixed-use property from Stratus Properties for $124 million. The downtown tower includes 158,935 square feet of retail and a 251-key W Austin Hotel.

Tishman Speyer’s sale of The Foundry, a two-building, 240,000-square-foot property near downtown Austin was another large office deal that closed in 2022. Beacon Capital Partners picked up the LEED-certified complex for an undisclosed amount.

The post Market Update: What’s Fueling Austin’s Large Office Pipeline appeared first on Commercial Property Executive.

Hartland Plaza in Downtown Austin. Image courtesy of CIM

CIM Group has sold Hartland Plaza, a 184,128-square-foot office building in Austin, Texas. However, the firm plans to acquire additional properties in the Austin market, Shaul Kuba, co-founder & principal, said in a prepared statement.

In the meanwhile, CIM Group already has several other transactions in the making. The firm recently agreed to sell a 4.6 million-square-foot portfolio, consisting of 185 retail and industrial non-core net lease properties, to Realty Income Corp. The $894 million deal would be CIM’s fourth with the company.

A Class A office asset

Completed on 3.4 acres in 1984, Hartland Plaza underwent extensive renovations from 2017 to 2019. The Class A, four-story building features 46,000-square-foot floorplates and more than 13,000 square feet of retail, according to CommercialEdge data. CIM had acquired the asset in 2015.

Located at 1717 W. Sixth St. in Austin’s downtown, the property includes a subterranean parking garage and an adjacent four-story parking structure. Amenities include a conference facility, fitness center, restaurant, salon and health spa. CIM also integrated bipolar ionization technology into the building’s HVAC system to improve air quality.

According to CommercialEdge data, Hartland Plaza was the largest office building that has changed hands in Austin since the beginning of the year. While the sales volume was on the small side, the metro continued to have one of the largest pipelines in the country, with 6.7 million square feet of office space under construction as of January, a recent report reveals.

The post CIM Group Sells Austin Office Building appeared first on Commercial Property Executive.

The Mueller Commercial Office Alpha Building. Rendering courtesy of Shorenstein Properties via PR Newswire

Construction is complete on the first phase of an office district at Mueller, the master-planned development in Austin. Dubbed Mueller Alpha, the building inaugurates a three-phase, 800,000-square-foot campus.

Located at 1900 Aldrich St., Mueller Alpha rises six stories and comprises 210,428 square feet. The Teacher Retirement System of Texas (TRS) will occupy the second through sixth floors as part of its relocated headquarters.

In December 2021, TRS acquired the property from the developer, Shorenstein Properties, according to documents from the pension plan’s board meeting. At the time of the acquisition, TRS said that it planned to begin moving personnel to Mueller Alpha in the spring of 2023.

Amenities and next steps

In the next phase of the relocation, TRS will move additional departments to Mueller Bravo, an adjacent 245,000-square-foot building developed by Shorenstein. That property is scheduled for completion in 2024, according to information on Shorenstein’s website. Also in the works are the Charlie and Delta buildings, which will comprise the office district’s 350,000-square-foot third phase.

Mueller Alpha includes retail and restaurant spaces on the first floor, owned by Catellus Development Corp. Catellus is also the master developer for Mueller, as the redevelopment of the city’s municipal airport is known. Mueller Alpha’s amenities include outdoor seating, meeting areas, an outdoor amphitheater and open-air courtyard. Aquila Commercial is the property’s leasing agent.

An eight-level parking garage, including two underground levels, is connected to the building via the open-air courtyard and accommodates about 1,000 vehicles.

Within walking distance of Mueller Alpha is the Mueller residential neighborhood. Also in proximity is downtown Austin with its myriad dining, retail and entertainment attractions.

Cadence McShane Construction Co. was the general contractor for the project, which was designed by Page Southerland Page Inc. Signature design elements include a Bendheim glass system on the office building’s façade, along with wood that will turn gray as the building ages and vines growing from cantilevered fiberglass planters.

The post 800 KSF Austin Campus Wraps Phase 1 appeared first on Commercial Property Executive.

Rendering of 1300 Westinghouse. Image courtesy of Transwestern

Freehill Development Co. has broken ground on a 176,546-square-foot industrial property in Georgetown, Texas. This is one of five projects announced by the company as part of a 1.1 million-square-foot development push around Austin and San Antonio, with the other developments situated in the San Marcos, Northeast San Antonio, Leander and Dripping Springs submarkets.

The company, which was established last year, focuses on delivering shallow-bay industrial projects that can also accommodate smaller tenants looking for space in Central Texas.

The speculative industrial project in Georgetown will include office, showroom and warehouse space, with spaces ranging between 4,500 and 55,750 square feet. Expected to be completed in July 2023, the development is designed by Studio8 Architects, while Owrey Construction is acting as general contractor.

Located at 1310 Westinghouse Road, the four-building development will feature ESFR sprinklers, clear heights between 18 and 28 feet, 290 total parking spots, six grade-level doors and 48 total dock-high doors. The project is close to Interstate 35, roughly 5 miles from Amazon’s fulfilment center in Round Rock, Texas, and some 35 miles north of Tesla’s Austin Giga Texas.

The developer appointed Transwestern to provide leasing services for 620,000 square feet of space across three projects from the planned portfolio, the Georgetown one included, with deliveries scheduled as early as the third quarter of this year.

Growing industrial presence in Central Texas

Freehill Development Co.’s other four projects are:

• Hero Way West, a three-building, 226,500-square-foot development in Leander, Texas, with delivery scheduled for the second quarter of 2024
• Clovis Crossing, a two-building, 213,125-square-foot project situated in San Marcos, Texas, scheduled for delivery in late 2023
• Freehill Selma in Selma, Texas, a three-building project totaling 127,500 square feet, with delivery expected in the third quarter of this year
• Freehill Dripping Springs, an 11-building industrial campus encompassing 285,000 square feet, with delivery expected in late 2024

Earlier this month, Jackson-Show announced the development of a 602,400-square-foot business park in Austin, Texas, that will offer office, distribution and warehouse space. ATX 130’s groundbreaking is scheduled for March.

The post Freehill Development Kicks Off North Austin Project appeared first on Commercial Property Executive.

ATX 130. Image courtesy of Jackson-Shaw

Jackson-Shaw is planning to answer the ongoing call for premier industrial accommodations in Austin, Texas, with the development of ATX 130, a business park that will offer approximately 602,400 square feet of office, warehouse and distribution space. The project’s estimated development cost is $50 million, according to the Texas Department of Licensing and Regulation.

Greystar, Whitman Peterson and Marketplace Real Estate Group are the project’s equity partners, while Comerica and Veritex provided construction financing. The development team also includes Burton as general contractor and Westwood as the appointed civil engineering firm. Groundbreaking is scheduled for March, with completion expected in early 2024.

READ ALSO: What’s Next for Industrial Development

ATX 130 will occupy a site spanning more than 67 acres in Austin’s Southeast submarket. Carrying the address of 6807 Elroy Road, the park will sit just off Highway 130 and roughly 5 miles from Austin-Bergstrom International Airport and Tesla’s 2,500-acre Gigafactory.

Jackson-Shaw is not hanging its hopes of success solely on ATX 130’s coveted location; the company has tapped architecture firm Method to design a flexible park that will allow it to cater to a wide range of potential tenants. The park’s four buildings will range from roughly 80,400 to 202,300 square feet and will be divisible to accommodate tenants requiring as little as 16,000 square feet or as much as 395,000 square feet.

Early buzz

Aquila Commercial’s Leigh Ellis and Blake Patterson are spearheading the leasing of ATX 130 on Jackson-Shaw’s behalf, and the team is welcoming robust interest in the property. Construction has yet to commence on the park and already, the project has attracted a commitment from Ferguson Enterprises. The plumbing supplies distributor preleased the 207,200-square-foot Building 3 in its entirety.

While industrial development in Austin is at an all-time high—new supply increased more than 97 percent year-over-year in the fourth quarter of 2022, according to a Newmark report—the future continues to bode well for the metro. “The market boomed from e-commerce activity following the pandemic, which propelled Austin as a distribution center,” the report states. “Austin has also been at the forefront as a tech manufacturing location, given the market’s reputation as a tech hub with a relative lower cost of living.”

ATX 130 is sprouting up in the right place at the right time. As noted in the Newmark report, with nearby Tesla’s ongoing expansion and Samsung’s growing presence, more companies that work with the manufacturers are entering the Austin market with industrial needs.

The post Jackson-Shaw to Build Austin Industrial Park appeared first on Commercial Property Executive.

Prologis project site, Cedar Creek, Texas. Image via Google Earth

Prologis Inc. is planning to add 629,000 square feet of premier logistics offerings to the suburban Austin, Texas, market. As reported in the Austin Business Journal, Prologis has set its sights on developing a five-building industrial complex on 75 acres in Cedar Park, Texas.

The new development will take shape along Brushy Creek Road, roughly 20 miles south of downtown Austin. The site consists of a 68-acre parcel and a 7-acre piece of land that Prologis acquired from National Instruments Corp. in July 2022, according to Williamson County records. Construction is expected to begin in spring or early summer, with an expected delivery in 2024.

READ ALSO: Trends That Will Shape Industrial Real Estate in 2023

Prologis knows how to pinpoint gaps in supply in industrial markets. In the fourth quarter of 2022, Cedar Park, which has an inventory of just over 1 million square feet, recorded a total vacancy rate of only 2.1 percent, according to a report by Avison Young. Additionally, there was a mere 70,000 square feet of product under development at the close of 2022. Overall, metropolitan Austin’s industrial market continues to thrive, with vacancy near record lows and asking rents having skyrocketed 26.9 percent over the last five years.

There appears to be no end in sight to the robust demand for product in the Greater Austin area. “Leasing activity is expected to remain above historic averages bolstered by Austin’s sustained population growth and its ongoing transformation into a national semiconductor manufacturing hub,” according to the Avison Young report. Prologis has had a decades-long presence in the Austin market, and as noted on the company’s website, its portfolio in the area totaled more than 2.6 million square feet in 2021.

The calming of the industrial sector

According to a 2023 forecast by Prologis, the U.S. industrial market is in for a few changes after several years of high-level activity. The real estate company predicts that, due to the rapidly increasing cost of capital, warehouse development starts will go on a major downswing this year, dropping an estimated 60 percent despite ongoing demand and rising rents. Prologis, which holds the distinction of being a global leader in logistics real estate, continues to expand its portfolio; however, it is not turning a blind eye to change in the industrial sector.

“We lease a million square feet on a daily basis. Let’s get our heads around that, a million square feet on a daily basis,” Hamid Moghadam, chairman & CEO of Prologis Inc., said during the company’s fourth quarter 2022 earnings conference call on January 18. “I mean, that is 10 times the amount of space anybody else leases in any sector in real estate. So, by watching these customers and their behavior, obviously, we’ll figure out if some bad stuff is about to happen and won’t be waiting for the quarterly report to analyze that.”

The post Prologis Plans Suburban Austin Industrial Project appeared first on Commercial Property Executive.

Apple’s Austin campus. Image courtesy of Apple

Construction crews will be busy over the new few years at Apple’s 33-acre campus in Austin, Texas. The consumer electronics giant intends to begin building the second phase of its planned $1 billion development next month.

The news comes more than three years after Apple broke ground on its sprawling Austin campus. At that time, Apple stated the project would be built out at 3 million square feet and house a variety of functions including engineering, R&D, operations, finance, sales and customer support. Initially expected to accommodate about 5,000 employees, the campus could eventually house 15,000.

An ever-expanding office campus

Apple recently filed plans with the Texas Department of Licensing and Regulation describing details of its latest office addition at the site. Identified as Capstone Phase Two AC09, the building will be a four-story, 203,941-square-foot facility to take shape at 6900 W. Parmer Lane. Estimated to cost $120 million, the development is slated to begin September 30 and be completed by March 30, 2025.

This filing follows a series of several other construction projects that Apple registered with the TDLR in August, totaling about $280 million. All developments are slated to begin this year and take roughly two years each to complete.

READ ALSO: Top 5 Southeast Markets for Office Deliveries

The most expensive planned development is a 298,970-square-foot multi-story building core and shell. The number of floors was not disclosed but the project is projected to cost $118 million, with construction beginning this February and finishing in February 2025. The company also filed plans for a five-story, 368,726-square-foot facility that is expected to cost $100 million, to be developed during the same time frame.

The final project detailed in the August filings was a $61 million, 1.2 million-square-foot parking garage that will have nine levels and space for 3,500 vehicles. Construction is also slated to begin next month, with completion estimated in two years.

The Austin Business Journal reported Apple also recently filed plans for a 33,000-square-foot building at the site that is expected to cost $22 million; that project is slated for groundbreaking in October 2024 and for completion by August 2025. According to the same source, the company filed plans to complete interior work on a five-story, 369,461-square-foot building in late September, at a cost of $46 million.

The architecture firm listed on the most recent projects is Dallas-based HKS Architects.

Austin’s office development boom

Apple is not the only company announcing plans for office development in the Austin area in recent months. The metro’s construction pipeline totaled approximately 7.7 million square feet as of November and leads the nation in terms of office construction relative to existing stock, according to a recent CommercialEdge report.

In early December, the Austin City Council approved zoning plans for a nearly 19-acre, mixed-use redevelopment plan on the Colorado River/Lady Bird Lake from Endeavor Real Estate Group that will include 1.5 million square feet of office space along with 1,478 residential units, a 275-key hotel and 150,000 square feet of retail and restaurant space.

Related Cos. has two separate office projects planned in Austin – a 106,854-square-foot boutique mass-timber office building at 901 South Congress and a 15-story, 475,000-square-foot office building with 16,700 square feet of retail at One Ladybird Lake.

The post Apple to Start Phase 2 of $1B Austin Campus appeared first on Commercial Property Executive.

Lockhart 130 Building 1. Image courtesy of Titan Development

Titan Development is continuing its development of Building 1 of the Lockhart 130 Industrial Park, a 167,794-square-foot Class A industrial building. The project is the first installation in the Lockhart 130 Industrial Park, a four-building, master-planned industrial park located in between Texas State Highway 130 and FM 2720 in Lockhart, Texas. Construction of Building 1 had started in the third quarter of 2022 and is expected for completion in the fourth quarter of 2023.

Building 1 of the Lockhart 130 industrial park is geared primarily towards tenants involved in manufacturing, processing, logistics and distribution. The facility is being built with 41,949-square-foot floor plates, and includes 36 dock doors with 32-foot clear heights, a 60-foot speed bay, a 185-foot deep truck court, an ESFR sprinkler system and 193 parking spaces. Aquila will market the finished facility to tenants.

READ ALSO: Trends That Will Shape Industrial Real Estate in 2023

At full build-out, Lockhart 130 will feature 643,256 square feet of space built over 45.1 acres. Situated along Texas State Highway 130, the development will have quick trucking access to metro Austin, 34 miles to the north, with San Antonio, Houston and Dallas all within a 4-hour drive. In the neighboring town of Uhland, Chem-Energy Corporation is constructing a $1 billion solar panel and batter manufacturing facility, and a 3,173-acre mixed-use community is being built to the southwest.

Titan Development Senior Vice President Joe Iannacone detailed the strength of the property’s location further, telling Commercial Property Executive, “Demand for warehouse and manufacturing space is growing at an immense pace in central and South Texas, and the Austin area is making a name as one of the nation’s top emerging industrial hubs. Manufacturers like Samsung, Tesla and Chem-Energy Corporation are joining the market and, at the same time, the workforce remains strong with a growing number of residents choosing to live in and around Austin.”

Additionally, the park will be within 40 miles of some of the state’s largest employers, in addition to Austin-Bergstrom International Airport.

Austin’s industrial growth continues

Bolstered by the city’s ever-growing population and its ongoing transformation into a national semiconductor manufacturing hub, logistics space in the capital of the Lone Star State has seen no shortage of demand, while supply struggles to keep up. According to data from a third quarter 2022 report from JLL, the city has a 4.2 percent vacancy rate, with 3.28 million square feet net absorbed year-to-date.

The city’s pipeline of 12.3 million square feet under construction has helped to alleviate constraints somewhat, as the 1.4 million square feet of space delivered through the quarter has been 85 percent pre-leased, the same data shows. Furthermore, asking rents continue to climb, with both direct and sublease rents increasing to over $10 per square foot.

For its part, Titan Development has continued to expand its development footprint throughout the city, adding additional buildings to its numerous industrial parks. In April, the firm had broken ground on a 297,057-square-foot fifth addition to its NorthPark35 Industrial Park. One month prior, the developer had completed the fourth building in its Titan Innovation Business Park, the first part of its second phase of the development.

The post First Phase of Austin Industrial Park Underway appeared first on Commercial Property Executive.

Image couresy of borevina via Pixabay.com

Austin’s city council has approved zoning plans to redevelop almost 19 acres of land on the south bank of the Colorado River/Lady Bird Lake, allowing developer Endeavor Real Estate Group to proceed with a six-building mixed-use, planned unit development.

The project, now known as 305 South Congress, was previously called the Statesman, after the Austin American-Statesman newspaper, which formerly occupied the property. The property’s owner is the Cox family, of Cox Enterprises Inc., the Atlanta-based conglomerate.

Plans at this point evidently call for six towers of up to 47 stories totaling 1.5 million square feet of office space, 1,478 residential units, a 275-key hotel and 150,000 square feet of retail and restaurant space.

READ ALSO: Office Subleasing Strategies

In addition, the development is planned to feature several acres of new parkland and public space, including a 1.5-acre plaza and bat viewing area next to the Congress Avenue bridge, a redesigned waterfront hike-and-bike trail, and an extension of Barton Springs Road through the site.

An Endeavor representative told the Austin Business Journal he expects groundbreaking to be at least a year off and that Endeavor plans to complete 305 South Congress in three phases.

The process of getting to this point has taken years, according to local media, with some opposition to the project’s size, objections to the hotel and especially concerns over the amount of affordable housing. The city council eventually decided to apply Endeavor’s affordable housing obligation of $23 million or more to housing outside the PUD boundaries.

Simmering city

Central Austin has multiple significant projects in the pipeline right now, two of them by Related Cos.

A 106,854-square-foot boutique mass-timber office building is planned for 901 South Congress, not even half a mile south of 305 South Congress. The other Related project, One Ladybird Lake, is a 15-story, 475,000-square-foot office building with 16,700 square feet of ground-level retail.

In addition, Lincoln Property Co. and Kairoi Residential recently broke ground on what will be Texas’ tallest building: Waterline, a 74-story, $520 million tower at 98 Red River St. Besides 700,000 square feet of office space, the structure will include a 251-key hotel and 352 residential units on the top 33 stories. Kohn Pedersen Fox and HKS are the architects.

The post Endeavor Gets Austin’s Approval for Massive Mixed-Use Project appeared first on Commercial Property Executive.

Brodie. Image courtesy of Barshop & Oles Co.

Lionstone Investments and Barshop & Oles Co. have surpassed a notable hurdle in their bid to convert the Brodie Oaks Shopping Center in Austin, Texas, into an innovative, 3.1 million-square-foot mixed-use destination. The Austin Planning Commission voted in favor of recommending the development partners’ rezoning request, with a few stipulations, as first reported by the Austin Business Journal.

Paying homage to the property’s history, Lionstone and Barshop have named the redevelopment Brodie. The partners have a grand vision for the retail property fronting Loop 360, and the rezoning of the site to a planned unit development is a necessity. The 365,000-square-foot Brodie Oaks, which debuted in 1982, will be replaced with multiple structures of varying heights and vast open space spanning the site’s 38 acres.

“Not only for Brodie but for most redevelopments, mixed-use allows for the highest and best use of a commercial site,” Milo Burdette, partner & vice president of development with Barshop & Oles Co., told Commercial Property Executive. “Providing transit-supportive mixed-use density will allow Brodie to be a community where people can work, live and play, lessening the miles traveled on public roadways and activating Brodie as a destination for South and Southwest Austin.”

READ ALSO: NAREE Report: Retail Real Estate’s Post-COVID Reinvention

Brodie is a well-conceived project; the master plan for the redevelopment began to develop in 2019 and reached a final state in 2020. At full build-out, the mixed-use property will feature more than 1.2 million square feet of office space; 1,700 multifamily units, including affordable housing, spanning a total of 1.5 million square feet; 140,000 square feet of retail and dining offerings and a 200-key hotel that will total 200,000 square feet.

The demand for housing is strong in fast-growing Austin, but the call for office space is less robust. Overall, the U.S. office market has not fully recovered from the ravages of the pandemic and Austin is no exception, but Barshop and Lionstone see a void that Brodie can fill.

“Brodie’s proximity and easy access to downtown, Austin-Bergstrom airport and numerous South and Southwest neighborhoods make it attractive to all types of office users. Many larger users are finding that it makes sense to have a presence in multiple areas of Austin to provide better access for their employees. Downtown and North Austin have many alternatives, but the options for South and Southeast Austin are more limited. Brodie will be able to fulfill some of that demand.”

The redevelopment endeavor will also be green to the core, featuring approximately 14 acres of open space, representing 45 percent of the project. An additional 8 acres will serve as a naturally vegetated buffer. Furthermore, 100 percent of the water quality volume at the property will utilize green stormwater controls, including irrigation, retention and infiltration. The transit-oriented redevelopment will also offer bicycle facilities and a shared-use bike path linked to off-site trails.

Next on the developers’ checklist is a City Council first reading, scheduled for December 1, 2022. If all goes as planned, the partners will finalize the Brodie design in 2023. Delivery of the project’s initial phase is expected in 2027.

Thumbs up from the public

Brodie Oaks Shopping Center has been around long enough to have its diehard fans, but plenty of locals see the benefit of a mixed-use project and embrace Barshop and Lionstone’s idea for the property.

“The existing ocean of parking, collection of empty big boxes, greatest hits of 1980s strip mall architecture is a gross underutilization of the site that maximized impervious cover and turned its back on some of the best views in Austin,” a longtime resident of the area’s South Lamar neighborhood wrote in a letter to the Austin Planning Commission. “In contrast, the Brodie project as envisioned by the development team strikes all the right notes: it decreases impervious cover, provides an inviting connection to the greenbelt, takes advantage of the gorgeous views, includes affordable spaces for creatives and housing, aligns with existing and future transit, and activates the site with a variety of uses for 24/7 engagement.”

The mall as a mixed-use destination is an increasingly popular concept. Earlier this week, the Phoenix City Council signed off on the planned $750 million redevelopment of the historic Metrocenter Mall into a mixed-use district to be known as The Village.

Ultimately, Brodie could carry an overall development price tag of approximately $1.5 billion; however, Burdette noted, future design and market conditions will determine the final figures.

The post 3.1 MSF Shopping Center Conversion Project Advances appeared first on Commercial Property Executive.

Bridgepoint Plaza

An affiliate of Spire Realty Group has secured $39.7 million in refinancing for a two-building office asset totaling 178,061 square feet, Bridgepoint Plaza I and II, in Austin, Texas.

A JLL Capital Markets team led by Senior Managing Director Wally Reid and Director Jayme Nelson represented the ownership. Argentic provided the two-year loan.

Completed in 1985, the Class A office property is situated on an 8.8-acre site and also offers 1,500 square feet of retail space. Amenities include a fitness center, a cafe, a rooftop pickleball and basketball court, outdoor seating areas and a conference center. Bridgepoint Plaza also features 580 parking spaces.

Located at 5918 W. Courtyard Drive, the facility is situated near Loop 360 and West Courtyard Road. The office building is surrounded by premier residential neighborhoods and a vast amenity base.

JLL Capital Markets also recently arranged a 10-year loan for BDP Holdings and represented the company in acquiring a five-story office building, totaling 265,942 square feet, in Southlake, Texas. The campus has been the headquarters of Sabre Corp. since 2002.

The post Austin Office Asset Lands $40M Refi appeared first on Commercial Property Executive.

Image by Jake Nebov via Unsplash.com

Hines, in a joint venture with The Galesi Group, has announced plans to develop approximately 1.7 million square feet of industrial space in Austin, Texas.

The Class A development’s first phase will include three buildings totaling 315,000 square feet of warehouse space. Designed by Powers Brown Architecture, the buildings will provide efficient floorplans with the goal of accommodating tenants seeking space between 30,000 and 150,000 square feet.

The 150-acre development site is in a Planned Unit Development with LI Base Zoning that will allow for light manufacturing, warehouse distribution, e-commerce, high-tech industrial and other uses. The industrial park will be situated between Harris Branch Parkway and Texas State Highway 130, within 10 miles of downtown Austin, and close to the Samsung Austin Semiconductor plant and Tesla’s Gigafactory.

The joint venture partnership will allow Hines to expand its industrial footprint in the Austin market, where demand for high-quality industrial space remains high, the company’s Managing Director Laura Denkler, said in prepared remarks.

According to recent CommercialEdge data, Austin ranked third among Top Southwest Markets for industrial construction as of June 2022. The market had 8.3 million square feet of industrial assets under construction and 6.9 million square feet of industrial space delivered year-to-date through June, above the annual deliveries of 2021 and 2020.

In June, Alliance Industrial Co. broke ground on Kyle/35 Logistics Park, a Class A industrial project totaling 1.4 million square feet in Austin.

The post Hines, Galesi to Develop 1.7 MSF Austin Industrial Park appeared first on Commercial Property Executive.

Southpark Meadows I & II. Image courtesy of Big V Property Group

Big V Property Group has acquired Southpark Meadows I & II, a 938,103-square-foot shopping center in Austin, Texas.

JLL Capital Markets brokered the transaction and arranged the acquisition financing. Allianz Life Insurance Co. of North America provided a $99 million, five-year senior loan, according to Travis County records.

Completed in 2004 and 2008, Southpark Meadows encompasses 30 one-story buildings that sit across a 92.7-acre site. One of the largest shopping centers in South-Central Texas, the property is anchored by a global discount department and grocery store and shadow-anchored by Target. Other tenants include Ross, Marshalls, HomeGoods, Best Buy and Five Below.

Located at 9600 South I-35, the facility is next to Interstate 45 and close to Routes 71 and 45. Mary Moore Searight Metropolitan Park and Onion Creek Greenbelt are in the property’s proximity. The population within a 5-mile radius exceeds 200,000 residents and the traffic count is approximately 13,391 vehicles per day, according to CommercialEdge data.

Senior Managing Directors Chris Gerard, Ryan Shore and Barry Brown, Associate Robby Westerfield and Analyst Cole Sutter from JLL represented the seller, with Managing Directors Chris McColpin and Senior Managing Director Chris Drew representing the buyer.

Chris Gerard and Ryan Shore, alongside Analysts Greyson Fewin and Pauli Kerr, recently arranged the sale of a five-block, 282,000-square-foot mixed-use development in Fort Worth, Texas.

The post Big V Buys 938 KSF Retail Center in Austin appeared first on Commercial Property Executive.

Indeed Tower

Design, architecture and engineering firm Page has signed a 51,000-square-foot, 15-year lease at Kilroy Realty’s Indeed Tower in Austin. Page was the architect of the LEED Platinum-certified, 36-story office building located at 200 W. Sixth St. in the city’s Central Business District.

Kilroy Realty picked up the office tower back in 2021 for $580 million. The 734,000-square-foot building features floorplates averaging 34,000 square feet and 35,000 square feet of retail. Amenities include a conference center and fitness club, as well as a 17,000-square-foot outdoor green area.

CommercialEdge data shows that recruitment advertising network Indeed currently occupies 306,632 square feet at the Class A+ property. Vinson & Elkins and Brown Advisory Group are also among the building’s tenants.

Earlier this year, Kilroy Realty expanded its presence in the Austin market with the $40 million off-market purchase of a 2.9-acre site in the Domain submarket, where the company will develop a 19-story office tower.

A leading market for office construction

According to a recent CommercialEdge report, Austin’s office vacancy rate was at 17.6 percent as of September, 250 basis points higher over the year. The value is also 100 basis points above the national average of 16.6 percent.

However, Austin is still leading the nation in terms of office construction relative to existing stock. The metro’s pipeline, totaling more than 7.4 million square feet, amounted to 8.5 percent of stock as of September.

The post Kilroy Realty Adds Tenant at Austin Trophy Tower appeared first on Commercial Property Executive.

Buda Midway. Image courtesy of JLL Capital Markets

A joint venture between United Properties and PCCP has sold Buda Midway Phase 1, a Class A, 474,465-square-foot industrial park in Buda, Texas. The three-building complex was subject to a construction loan originated in 2021, totaling $27.6 million, from Wells Fargo Bank, CommercialEdge data shows.

Phase 2 of the project will include four industrial buildings, totaling approximately 390,000 square feet, with the first facility set for completion in spring 2023.

Phase 1 came online this year. The 35.3-acre campus comprises rear-load and one cross-dock buildings, two of which are 115,090 square feet each and offer 30-32-foot clear heights, along with a 244,285-square-foot facility. The largest property, sitting on 19 acres, offers 36-foot clear heights and is designed to achieve LEED certification. The complex offers 138 dock doors, 60 trailer parking spots and 678 parking spaces. Phase I is fully leased to Sherri Hill, Four Hands and CED Greentech, the latter having preleased 38,840 square feet almost a year ago.

READ ALSO: Top Southwest Markets for Industrial Construction

Located at 1795 Fire Cracker Drive, the property is 15 miles from Austin and sits near the intersection of Interstate 35 and State Highway 45, offering access to Austin, San Antonio and Dallas-Fort Worth. Austin-Bergstrom International Airport is 16.5 miles away. Other warehouses in the area house companies including US Foods and Amazon.

The JLL Capital Markets team representing the seller included Senior Managing Directors Trent Agnew and Dustin Volz, Director Dom Espinosa, Associate Josh Villarreal and Analyst Megan Babovec.

Austin’s industrial development hub

Austin’s industrial market is continuing to expand, with new projects continuously added to the supply pipeline. Development is highly concentrated in the Georgetown suburb, with three new facilities that are expected to come online by the end of this year and in 2023.

Titan Development broke ground in April, adding 297,057 square feet to the NorthPark35 industrial campus. In March, Wells Fargo Bank originated a construction loan for Stonelake Capital Partners, which started construction in May on Georgetown Logistics Park, a complex totaling 620,000 square feet. A recent addition to this Austin suburb took place at the end of last month, when Molto Properties broke ground on Blue Springs Business Park, a 604,064-square-foot industrial park, just off Interstate 35.

Titan Development also acquired a 188-acre site in Hutto, Texas, to develop a major project. An industrial park totaling almost 2.6 million square feet will rise along Highway 79, near the $17 billion Samsung semiconductor plant.

The post United Properties, PCCP Sell Austin-Area Facility appeared first on Commercial Property Executive.

While off to a slow start in the first months of the year, investment activity within Austin’s office market continued to lack momentum in the second quarter of the year. The Texas metro registered one of the lowest transaction volumes across similar growth Sun Belt cities, with Charlotte ($720 million), Nashville ($913 million), Atlanta ($1.17 billion), Phoenix ($1.43 billion), Houston ($1.54 billion) and Dallas ($2.43 billion) all recording higher volumes.

Across all these markets, only Charlotte ($369 per square foot) had a higher price for office product, with Austin office prices averaging at $313 per square foot in the first six months of 2022. Prices in Austin dropped slightly since the end of the first quarter, when they reached $316 per square foot and were significantly lower than at the same point last year ($509 per square foot).

Biggest office deals in H1

In June, Ryman Hospitality Properties Inc. purchased Block 21 from Stratus Properties Inc. in the biggest commercial deal of the second quarter. The mixed-use property changed hands for approximately $260 million, inclusive of the buyer’s assumption of existing debt reaching $136 million. The 476,150-square-foot downtown property comprises the 251-key W Austin Hotel, a 2,750-seat entertainment venue dubbed Austin City Limits Live at the Moody Theater, as well as class A office space, among others.

READ ALSO: Shorenstein Sells Austin Tower for $138M

Also in June, AEW Capital Management purchased a two-building office complex totaling 330,000 square feet in East Austin. The seller, Riverside Resources, was the property’s original developer. AEW picked up Centro South and North with two, $77 million and $75 million acquisition loans, provided by PGIM Real Estate and First United Bank and Trust Co., respectively.

In April, a joint venture between DRA Advisors LLC and Pillar Commercial purchased 823 Congress, a 190,254-square-foot office property in the CBD. The buyer, New York-based Brickman, bought the B Class, 16-story asset with the help of a $61.7 million loan provided by RBC Bank.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Office Deal Volume in Austin Was Down in H1 appeared first on Commercial Property Executive.

Related Cos. has announced plans to develop two Class A Austin office projects. A boutique office building dubbed 901 South Congress will take shape in the South Congress District, while the company teamed up with Christopher Investment Co. to build One Ladybird Lake along 750 feet of waterfront property downtown.

Designed by KPF, One Ladybird Lake will feature 475,000 square feet of flexible office space and 16,700 square feet of retail space on the ground floor. Related Cos. expects to break ground on the 15-story building in late 2023 and deliver it in 2025.

One Ladybird Lake aims to achieve LEED Platinum certification and will feature four wrap-around terraces, a penthouse bar, front-of-house facilities, a green roof equipped with solar panels, as well as bee boxes. The outside amenities will include also a bike path.

READ ALSO: Blackstone Plans Austin Industrial Project

Designed by Gensler, the 106,854-square-foot 901 South Congress will be five-story tall with a terrace on each floor and will include street-level retail. Related Cos. plans to kick off construction on the company’s first mass-timber building this year and expects 901 South Congress to come online in 2024.

A more sustainable approach to office development

This use of sustainably sourced wood will allow the boutique office building to have a lower carbon footprint, with construction generating 40 percent less carbon when compared to traditional construction methods, while also avoiding the release of 20 tons of CO2. Hines also opted for heavy timber for its first Austin office project in four decades. T3 Eastside, an office asset totaling 101,000 square feet of space, is expected to come online in mid-2023 at 1200 E. Fourth St.

As of September, 59 office buildings totaling nearly 13.8 million square feet were under construction across Greater Austin, CommercialEdge data shows. The pipeline also included 260 projects with a combined 57.2 million square feet in the planning and permitting stages. Last week, a partnership between Lincoln Property Co. and Kairoi Residential broke ground on Waterline, a 2.7 million-square-foot project set to become the tallest tower in Texas at the planned height of 1,022 feet.

The post Related Cos. Plans Austin Office Projects appeared first on Commercial Property Executive.

Waterline. Image courtesy of Atchain

Lincoln Property Co. and Kairoi Residential recently broke ground on Waterline, a mixed-use development that, at a planned height of 1,022 feet, will hold the distinction of being the tallest tower in the state of Texas.

The 2.7 million-square-foot project will feature, among other offerings, a whopping 700,000 square feet of premier office space and cost an estimated $520 million to realize, according to the Texas Department of Licensing & Regulation.

Standing 74 stories, Waterline will mark the downtown Austin skyline at 98 Red River St. The striking high-rise will hover above Waller Creek and Lady Bird Lake on a site spanning more than 3 acres and, with the addition of new pedestrian bridges, will act as a new pathway from the central business district to the bustling Rainey Street Historic District.

READ ALSO: Top Markets for Office Transactions in H1 2022

Architecture firms Kohn Pedersen Fox and HKS are behind the design of Waterline, which will boast 24,000 square feet of ground-level restaurant and retail offerings just below the 13 floors that will be home to the 251-key 1 Hotel Austin. The top 33 stories of the tower will house a 352-unit upscale residential segment that will have its own dedicated amenities.

Waterline. Image courtesy of Atchain

Waterline’s office segment will feature Class A offerings spanning 27 floors in the middle of the LEED Gold-certified tower. The office amenities will include a 14th-floor amenity deck with 24,000 square feet of landscaped outdoor space, as well as a bar and lounge, a prep kitchen and indoor meeting spaces. On the second floor, office users will also be able to avail themselves of a state-of-the-art, 7,000-square-foot fitness facility.

“The Austin office market continues to see high demand from both corporate and technology users for best-in-class developments,” Seth Johnston, senior vice president, Lincoln Property Co., told Commercial Property Executive. “This allows companies to create a more connected office experience through heightened amenities, a commitment to sustainability, and access to the best Austin has to offer. Waterline will deliver exactly that, only to be enhanced by the creek side retail and 1 Hotel amenity offerings.

Not too much for Austin’s office market

Dallas-based LPC’s Austin portfolio is in growth mode, adding more and more square footage to the Austin office market. The real estate company has two other joint venture projects under construction, The Republic office tower and the mixed-use Sixth and Guadalupe, which are scheduled for delivery within the next two years.

LPC is hardly alone in its bid to build additional office accommodations in Austin. With demand and pricing on the rise, construction activity continues to go on the upswing, resulting in 8.5 million square feet under development during the second quarter of 2022, according to a report by Avison Young.  LPC, however, is undeterred by the competition.

READ ALSO: Ivanhoé, Greystar Kick Off Downtown Austin Project

“While the delivery of this project is a few years out, we are confident in the continued growth and demand for mixed-use development projects in Austin,” Johnston said. “When Waterline delivers in 2026, the office, for-rent luxury residential homes, and 1 Hotel partnership will provide a best-in-class experience for the users of this project that will allow them to work, live and stay in a premier location that represents the best of what Austin has to offer.”

Waterline. Image courtesy of WAX

There’s statistical evidence that demand in the Austin office sector may very well remain strong enough to absorb the large amount of space that Waterline will deliver four years from now. As noted in the Avison Young report, Austin leads all U.S. markets in office employment growth, having added nearly 75,000 jobs, marking a 23 percent increase between February 2020 and April 2022. Additionally, in support of Johnston’s earlier comment, the report found that large tech users continue to evaluate the Austin market, with high-tech job postings having increased 35 percent from March 2020 to June 2022.

The investment and lending communities apparently see value in the market as well. Canada’s Public Sector Pension Investment Board is the main equity partner for Waterline. And Blackstone Mortgage Trust Inc. supplied the construction loan for the project, noting in a prepared statement that it is still seeing strong demand for new, best-in-class residential, office and hospitality assets in high-growth markets like Austin.

LPR and Kairoi have selected DPR to serve as general contractor for Waterline. Office tenant improvements are on track to begin in May 2025, and the tower is scheduled to top out in August 2025.

The post Lincoln Property, Kairoi Break Ground on $520M Austin Project appeared first on Commercial Property Executive.

Blue Springs Business Park. Rendering courtesy of Transwestern

Molto Properties has broken ground on Blue Springs Business Park, a three-building speculative industrial complex totaling 604,064 square feet in Georgetown, Texas. The developer expects to deliver its first logistics project in Central Texas in the second quarter of 2023.

Adjacent to the Citigroup Data Center, just off Interstate 35, the business park will take shape on 43 acres at 610 Blue Springs Blvd. Blue Springs Business Park can accommodate tenants seeking 20,000 square feet to 604,064 square feet and will include:

• Building 1 totaling 124,914 square feet with a 32-foot clear height
• The 310,366-square-foot Building 2 with a 36-foot clear height
• Building 3 encompassing 168,784 square feet with a 32-foot clear height

The two smaller structures have a rear-load configuration, while the largest of the three has a cross-dock design. Equipped with an ESFR sprinkler system, Blue Springs Business Park features a total of 170 dock high doors, six grade level ramps along with 90 trailer parking spaces and 580 car parking spaces.

READ ALSO: Is Industrial’s Boom Era Ending?

The development team includes Seeberger Architecture and Langan Engineers heading the design as well as Burton Construction serving as the general contractor. Molto Properties selected Transwestern to market the Class A business park. The leasing team includes Vice President Carter Thurmond and Senior Associate Nash Frisbie.

The industrial complex will be within 5 miles of Texas State Highway 130, with several points of ingress and egress along Blue Springs Boulevard and Southeast Inner Loop. Blue Springs Business Park will be some 25 miles north of downtown Austin, and 31 miles away from Austin-Bergstrom International Airport.

The industrial pipeline of Georgetown

Blue Springs Business Park. Rendering courtesy of Transwestern

Within a 5-mile radius of Blue Springs Business Park, there are two other industrial projects underway, according to CommercialEdge. The 449,600-square-foot Portman Longhorn Junction developed by Portman Holdings and Westinghouse35, totaling 230,000 square feet and owned by Stonemont Financial Group. Both properties are anticipated to come online in 2023.

As of August, 16 industrial projects totaling 3.6 million square feet were under construction across the Austin suburb. The pipeline also included 18 developments encompassing 6.8 million square feet in the planning and permitting stages.

In May, Stonelake Capital Partners began construction on Georgetown Logistics Park. The three-building industrial complex totaling 620,000 square feet will take shape at 1800 Aviation Drive, with completion scheduled for early 2023. Meanwhile, Titan Development continues to add to NorthPark35 Industrial Park. At full buildout, the campus will offer more than 1.7 million square feet of Class A industrial space.

The post Molto Properties Kicks Off Austin-Area Project appeared first on Commercial Property Executive.

1600 E 4th St. Image courtesy of Tishman Speyer.

Tishman Speyer has closed on the sale of The Foundry, a two-building, 240,000-square-foot mixed-use office development located at 310 Comal St. and 1600 E 4th St. in Austin, Texas.

Tishman Speyer, represented by Cushman & Wakefield, sold the property to Beacon Capital Partners for an undisclosed amount.

Cushman & Wakefield Vice Chairman Michael McDonald and Executive Managing Director Jonathan Napper represented Tishman Speyer in the transaction. Before the sale, the firm had worked alongside the property’s previous owner, Cielo Property Group and CBRE, leasing 96 percent of space within both buildings.

Tishman Speyer’s acquisition of the office complex in two phases in 2021 marked its entry into the Austin market. The transaction was subject to a $110.5 million loan, according to CommercialEdge data.

The two buildings of the LEED-certified campus, divided as Foundry I and Foundry II, were constructed in 2019 and 2021, respectively. Current tenants include Cloudflare, DPR Construction and the Integral Group, CommercialEdge data shows. The buildings’ construction was completed with sustainable materials. Amenities include a rooftop terrace, a bike room and 5,000 square feet of retail space. Situated at the intersection of Austin’s 4th and Comal streets, the campus is within 1 mile of downtown Austin, with quick access to many restaurants and cultural sites.

Austin’s office market acceleration

Austin currently ranks among the nation’s top markets for office construction starts, with 8.4 million square feet of space underway and 830,000 coming online as of the second quarter of 2022, following over $1 billion in sales, according to CommercialEdge data. Furthermore, two-fifths of the space is concentrated within Austin’s downtown district, the same data shows. The region continues to see an influx of companies to Austin and other Sun Belt cities, fueling a high demand for office space.

Acknowledging these trends, Tishman Speyer Managing Director Nooshin Felsenthal said in prepared remarks that in addition to launching new product lines and platforms, the company has sought to expand into dynamic, technology-rich markets defined by strong population growth, innovative companies and exceptional academic institutions.

Elsewhere in Austin, the firm is developing 321 West, a 58-story, 561,000 square-foot mixed-use tower in the city’s central business district, scheduled to open in 2024.

The post Tishman Speyer Sells Austin Office Complex appeared first on Commercial Property Executive.

Bouldin Creek

After a year of ownership, DivcoWest has secured a $103 million financing package for Bouldin Creek, a LEED Gold-certified office building totaling 167,130 square feet in Austin. TIAA provided the variable interest rate loan, Travis County records show.

In the first half of 2022, 79 office properties totaling nearly 4.4 million square feet across Greater Austin received more than $4.4 billion in the form of acquisition loans or refinancing, CommercialEdge data shows.

Earlier this year, DivcoWest also landed $145 million to refinance a 24-story office high-rise in Glendale, Calif. CBRE arranged the five-year loan originated by Deutsche Bank, which retired a $120 million loan provided by AXA Equitable Life Insurance Co.

READ ALSO: Top States for LEED-Certified Office Buildings

Bouldin Creek came online in 2021 at 2043 S. Lamar Blvd. The Class A, five-story property features floorplates that average 50,000 square feet, 2,500 square feet of retail space and a parking ratio of 3.9 spaces per 1,000 square feet, CommercialEdge data shows.

Designed by Michael Hsu Office of Architecture and Studio8 Architects, Bouldin Creek includes outdoor terraces, a rooftop deck, a fitness center with lockers and shower facilities, bike storage and electric vehicle charging stations. The multi-tenant property also encompasses more than 2 acres of shaded green space with open-air workspaces, walking trails and a creek.

The boutique office building is within 2 miles of Interstate 35 and less than 3 miles from downtown Austin. The Republic, a 48-story office tower developed by DivcoWest, Lincoln Property Co. and Phoenix Property Co., and 6th & Guadalupe, a 66-story mixed-use tower developed by DivcoWest, Lincoln Property Co. and Kairoi Residential, are both within a 3-mile radius of the property.

A leading market for office construction

Greater Austin had 8.4 million square feet of office projects under construction as of June, according to CommercialEdge. The value represents 9.4 percent of total inventory, more than four times the national average of 2.2 percent.

In addition, the metro was among the top markets for office starts (2.7 million square feet) in the first half of the year. One of the projects kicked off construction in April, when Ivanhoé Cambridge teamed up with Greystar to develop 1121 at Symphony Square, a 175,000-square-foot office project in downtown Austin.

The post DivcoWest Lands $103M for Austin Office Asset appeared first on Commercial Property Executive.

Sunrise Commerce Center. Image courtesy of 5G Studio Collaborative

IDI Logistics is one step closer to a September groundbreaking for Sunrise Commerce Center, a two-phase development totaling 465,660 square feet of Class A industrial space in Round Rock, Texas. IDI Logistics acquired the 36-acre project site in late 2021 and expects to deliver the business park in mid-2023.

The owner selected Adolfson & Peterson Construction to develop the five speculative buildings along the Interstate 35 corridor. The project team also includes 5G Studio Collaborative serving as architect and Pacheco Koch Civil Engineering.

As of late July, 76 industrial projects totaling 10.6 million square feet were underway across metro Austin, CommercialEdge data shows. The pipeline also included nearly 32.3 million square feet of development in the permitting and planning stages.

In the first half of the year, developers in Greater Austin started work on 36 projects encompassing 6.9 million square feet, according to the same data provider. The volume of construction starts is well above the same period in 2021, when the figure showed 13 projects totaling nearly 1.2 million square feet.

The civil engineering firm also provided services for Griffin Partners’ Port 45 in Wilmer, Texas. The two-building industrial park encompassing 567,516 square feet will come online near Interstate 45.

Sunrise Commerce Center

The industrial park will take shape on 36 acres at 2380 Oakmont Road. The initial phase will include three buildings encompassing 310,693 square feet, while the second addition will feature two build-to-suit projects totaling 154,967 square feet. All five facilities will have clear heights between 32 and 36 feet.

The first phase will feature rear-load buildings equipped with ESFR sprinkler systems, two 130-foot and a 185-foot truck courts, 602 car parking spaces and 64 trailer parking spaces. The second phase will include a 130-foot and a 185-foot truck court, 353 vehicle parking spaces and 30 trailer parking spaces.

IDI Logistics selected Stream Realty Partners to market Sunrise Commerce Center. The leasing team includes Stream Managing Director & Partner Sam Owen and Executive Managing Director & Partner Will Nichols.

Sunrise Commerce Center will be less than 2 miles from Interstate 35, less than 30 miles from Austin-Bergstrom International Airport and some 24 miles from downtown Austin.

The post IDI Logistics to Break Ground on Austin-Area Project appeared first on Commercial Property Executive.

Nationally, nearly 151.7 million square feet of office space was taking shape at the end of June, amounting to 2.2 percent of total stock. The 26.5 million square feet that broke ground this year is situated mostly in the top 10 markets for construction starts, led by Sun Belt cities. The leading markets for office starts in the first half of 2022 were Dallas (3.8 million square feet) and Austin (2.7 million square feet).

Austin’s office pipeline, aligning to similar-growth Sun Belt cities, was animated during the second quarter of the year. Several office projects broke ground, while more than 830,000 square feet came online. Stream Realty Partners’ 372,000-square-foot RiverSouth project was the largest office building to be completed during these three months.

New projects in the office pipeline

In April, Carr Properties and Manifold Development broke ground on Block 16, a 738,000-square-foot office tower to reach 43 stories. Gensler is responsible for the design of the building that is currently rising at 201 San Jacinto Blvd., representing Carr’s first development in the Texas Capital.

That month, another significant downtown office property started to take shape: a joint venture between Ivanhoé Cambridge and Greystar broke ground on 1121 at Symphony Square in Austin’s Innovation District. To comprise 175,000 square feet, the seven-story building is planned to achieve LEED Gold certification.

In June, a joint venture between Lincoln Property Co. and Kairoi Residential broke ground on 98 Red River St., a 74-story supertall to become the highest tower in Texas. The 1,000-foot skyscraper is slated to offer 686,000 square feet of office space, 352 residential units and 251 hotel keys. The mixed-use tower was designed by Kohn Pedersen Fox Associates and HKS.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Office Pipeline Was Active During Q2 appeared first on Commercial Property Executive.

While the Texas capital’s office market is continuing its record growth rate compared to most U.S. markets, the metro’s vacancy is keeping pace with new deliveries. On a year-over-year basis through June, Austin saw office vacancy drop 90 basis points.

The metro’s average in June was close to the national vacancy rate that month, which clocked in at 15.4 percent, down 50 basis points since March. Compared to secondary Sun Belt markets, Austin’s vacancy rate exceeded that of Charlotte (14.7 percent) and Phoenix (13.9 percent), while Dallas (18.0 percent), Nashville (18.0 percent), Atlanta (20.0 percent) and Houston (24.6 percent) recording higher rates in the first summer month.

One of the notable leases signed during the second quarter of 2022 was tech consulting giant Accenture’s 37,800-square-foot renewal at Capital City Partners’ Monterey Oaks office park. Constructed in 1998, the 160,65-square-foot property is located in Southwest Austin and comprises five single-story buildings.

In June, the Southwest Austin submarket recorded one of the highest vacancy rates in the metro at 18.1 percent, along with Austin East (25.8 percent) and Northwest (26.4 percent). Southeast Austin (6.4 percent), Austin North (9.2 percent) and Cedar Park (9.7 percent) had the lowest rates that month.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Office Vacancy in Austin Declines in Q2 appeared first on Commercial Property Executive.

405 Colorado. Image courtesy of Cushman & Wakefield

Brandywine Realty Trust has landed another notable tenant for 405 Colorado, a Class A office tower totaling 205,803 square feet in Austin’s CBD. Cushman & Wakefield signed an 18,005-square-foot lease and will occupy an entire floor of the LEED Silver-certified building.

After spending more than a decade at its current location, the international real estate services firm plans to finalize its relocation from 200 W. Cesar Chavez St. in January and will occupy the 23rd floor, below the two levels housing JPMorgan Chase.

The tenant roster for the 25-story high-rise includes Snap Inc., the parent company of instant messaging app Snapchat, which agreed to occupy two floors of the building totaling approximately 38,000 square feet in early 2022. The office tower is also home to law firm Perkins Coie and investment management firm AllianceBernstein, according to CommercialEdge.

As of May, the office vacancy rate across the Austin metro increased by 20 basis points month-over-month to 15.6 percent, CommercialEdge data shows. While this figure is slightly above the national average (15.4 percent), it represents a 90-basis-point drop compared to May 2021. In the same period, the average office vacancy rate in downtown Austin reached 14.8 percent.

While the tenant opted for in-house representation with Cushman & Wakefield Director Richard Whiteley leading the lease negotiations, the landlord was represented by CBRE Executive Vice President Troy Holme and Senior Vice Presidents Katie Ekstrom and Casey Ford, according to the Austin Business Journal. Currently, 405 Colorado is 91 percent leased, but it is expected to become fully occupied in the course of the upcoming month, Holme told the same publication.

A Class A office tower in downtown Austin

Completed in 2021, the office tower at 401-405 Colorado St. features floorplates between 17,238 and 19,087 square feet sitting on top of a sky lounge on the 14th floor as well as 13 levels of parking and a 3,665-square-foot retail space on the ground floor. The structured parking section offers a ratio of 2.6 spaces per 1,000 square feet as well as bike storage.

Designed by Duda|Paine Architects, the amenity-rich high-rise features a ground-floor lobby, a conference center, a café and bar area, a fitness center, end-of-trip facilities along with an outdoor deck. Cushman & Wakefield through its Project and Development Services team headed by Senior Director Eric Smith plans to tailor the leased office space with the help of IA Architects along with NOVO Construction, which will serve as general contractor.

The post Cushman & Wakefield to Relocate Within Downtown Austin appeared first on Commercial Property Executive.

Nationally, $35.3 billion worth of office product had traded up until the end of May in 2022, at an average sales price of $274 per square foot. Austin’s office price in the first five months of the year surpassed the national average and clocked in at $287 per square foot, making it one of the more expensive Sun Belt cities this year, along with Charlotte ($405 per square foot), Phoenix ($283 per square foot), Atlanta ($280 per square foot) and Nashville ($234 per square foot).

Austin’s office transaction volume in the first five months of the year fell behind that of other metros’ in the Sun Belt area, which surpassed the $1 billion mark: Dallas ($1.9 billion), Houston ($1.5 billion), Phoenix ($1.1 billion) and Atlanta ($1.0 billion).

In May, Arc Capital Partners purchased a 100,166-square-foot Class A creative office complex, dubbed Westview. The buyer backed the transaction with a $39 million loan originated by Grant Street Funding. Prescott Group sold the six-story property, which appraised for $53.9 million and last traded in early 2016. At the time of the sale, coworking giant WeWork occupied 46,410 square feet at the location.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Office Transaction Volume Increases YOY appeared first on Commercial Property Executive.

The Texas capital’s average listing rate that month was $44.5 per square foot, $2.2 more than the previous month and up 2.3 percent year-over-year. Across similar growth Sun Belt cities, Austin holds the highest listing rate, followed by Charlotte ($33.1 per square foot), Houston ($31.1 per square foot) and Nashville ($30.6 per square foot). Among all U.S. markets, Charlotte registered the highest increase (14.3 percent) in its average office listing rate since May 2021.

Austin, along with Phoenix (13.9 percent) and Charlotte (14.7 percent), bore the lowest vacancy rates that month across the Sun Belt area, while Dallas (18.0 percent), Nashville (18.0 percent) and Atlanta (20.0 percent) exceeded the national average, which hit 15.4 percent in May.

On a submarket level, Austin Northwest (26.1 percent), Southwest (17.6 percent), Northeast (16.8 percent), South (14.9 percent) and Downtown (14.8 percent) bore the highest office vacancy rates that month. On the other side of the spectrum, Austin Southeast (6.9 percent), Round Rock (5.9 percent) and Cedar Park (9.3 percent) registered the highest rates.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Office Vacancy Exceeds National Average appeared first on Commercial Property Executive.

Adding planned stock to the projects that have already broken ground, Austin’s pipeline balloons to 25.9 percent of total stock, far outpacing every other market in the country. Nashville is trailing the Texas capital, with its under-construction plus planned stock representing 16.2 percent of total supply. At the same point last year, Austin’s office pipeline comprised 7.6 million square feet of office space, which also represented 10.0 percent of the metro’s pipeline back then.

Nationally, 151.2 million square feet of office space was taking shape that month, with 20 percent of this under-construction supply concentrated within the Central Business Districts. The office development pipeline made up for 2.2 percent of total stock. Other Sun Belt cities also registered higher relative pipelines than the national average, including Charlotte (3.6 percent) and Dallas (3.2 percent).

In May, a joint venture of AQUILA Commercial and institutional investors advised by J.P. Morgan Asset Management commenced construction on Alto, a 110,000-square-foot office building in East Austin. In February, the developers secured a $42.7 million construction loan originated by First United Bank & Trust Co. The five-story Class A property is slated for completion by the end of 2023.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin’s Office Development Boom Continues appeared first on Commercial Property Executive.

Image by Peter H via Pixabay

During the height of the pandemic, e-commerce had a remarkable run, becoming a cornerstone for the economy and households in need of safe shopping. The industrial construction scene has experienced remarkable expansion, which prompted developers to adhere to green building practices and energy-efficient features. An illustrative example is the partnership between Stream Realty Partners and Catalyze.

The national in-place average rent rose 4.7 percent year-over-year through April to $6.5 per square foot, while the vacancy rate stood at 4.7 percent in May, according to CommercialEdge data. Overall, in late June, the industrial market totaled nearly 17.3 billion square feet of industrial space, while nearly 700 million square feet of space was under construction. The absolute leader of all markets was Dallas, followed by Phoenix (43 million square feet underway) and the Inland Empire (37 million square feet).

In the ranking below, we will be focusing on the top five markets for industrial construction in the Southwest, based on their construction pipelines. All five metros are in Texas, the markets combined will expand the national industrial stock by 100 million square feet.

1. Dallas

DFW has one of the largest industrial stocks in the country and the largest industrial construction pipeline, not just in the Southwest, but in the U.S. In late June, the metro had more than 61 million square feet underway, the equivalent of 7.2 percent of its total stock, which is slightly above 840 million square feet.

In 2022 through June, developers delivered nearly 15 million square feet and, if the pace of deliveries remains constant, this year’s volume is on track to outperform 2021 (24.7 million square feet, or 3.1 percent of stock) and at least match 2020 (28.6 million square feet, or 3.7 percent of stock).

Notable projects under construction include Stream Realty Partners’ 3.4-million-square-foot development in Mesquite, east of Dallas, and Texas Instruments’ 4.7-million-square-foot chip manufacturing plant in Sherman.

2. Houston

Houston occupies the second position in this ranking with more than 21.2 million square feet of industrial space under construction. The figure equates to 3.9 percent of the total stock, which increased to 547.8 million square feet.

In the first half of 2022, nearly 4.9 million square feet of industrial space came online, 0.9% of total stock. Although it is too early to say how much of the under-construction inventory will be completed by year-end, the volumes of the previous years have been similar and may end up leading this year’s volume: in 2021, 19.6 million square feet of industrial space, or 3.8 percent of total stock, was delivered, while in 2020, 19.7 million square feet, or 3.9 percent of total stock, was added.

Notable industrial developments in Houston include the 507,000-square-foot warehouse for Article, a Canada-based online furniture company, and TGS Cedar Port Industrial Park in Baytown, Texas. At more than 15,000 acres, it is the largest master-planned, rail-and-barge-served industrial park in the U.S.

3. Austin

The sustained performance of the industrial market adds to Austin’s already notorious versatility. As of June, the Texas capital had 8.3 million square feet of industrial space under construction, which with its 114.5 million-square-foot market represents 7.2 percent of total stock.

In 2022 through June, more than 6.9 million square feet came online, already above the annual deliveries of 2021 (6.7 million square feet, or 6.7 percent of total stock) and 2020 (2.1 million square feet, or 2.1 percent of total stock).

Although Austin is one of the metros where Amazon is pausing development plans indefinitely for a distribution center in Round Rock, the metro still has a great impact on the industrial market. Projects like Samsung’s semiconductor plant in Taylor and Tesla’s Giga Texas have been attracting more industrial development. Recently, Titan Development announced the 2.6 million-square-foot Hutto Mega TechCenter, and Alliance Industrial Co. is starting construction on Kyle/35 Logistics Park, a 1.4 million-square-foot park.

Data provided by CommercialEdge

4. El Paso

Nestled between New Mexico and Mexico, El Paso shows increasing industrial construction activity. In mid-2022, the metro had some 5.7 million square feet of industrial space under construction, the equivalent of 10.9 percent of stock—the largest percentage of stock in this ranking. Still, the metro’s industrial inventory is the smallest of the metros on this list, at just 52.7 million square feet.

No projects were completed in 2022 through June, but El Paso saw incredible volume expansion over the past two years. Nearly 4 million square feet was delivered in 2021, or 8.1 percent of total stock, from 234,000 square feet (just 0.5 percent of total stock) in 2020.

5. San Antonio

With nearly 4 million square feet under construction, San Antonio rounds out the top five. The figure is the equivalent of 3.4 percent of total stock, which currently totals more than 116 million square feet.

By June, developers had delivered more than 2.7 million square feet, already close to the 3.1 million square feet of added volume in 2021 (2.8 percent of stock), and half of 2020’s volume, when the industrial inventory was expanded by 4.5 million square feet (4.3 percent of total stock).

Among the projects currently under construction is Cornerstone Commerce Center, VanTrust Real Estate’s 1 million-square-foot speculative development.

The post Top Southwest Markets for Industrial Construction appeared first on Commercial Property Executive.

Image by moritz320 via Pixabay

AEW Capital Management has acquired Centro South and North, an office complex totaling 330,000 square feet in East Austin, from its developer, Riverside Resources, according to Travis County records.

AEW financed the purchase of Centro South with a $77 million acquisition loan originated by PGIM Real Estate, set to mature in June 2029. Meanwhile, First United Bank and Trust Co. provided a 5-year, $75 million financing package for the acquisition of Centro North.

In the first five months of the year, Greater Austin office sales added up to an estimated $417 million, according to CommercialEdge. The properties traded for an average $287 per square foot; the price was significantly higher than the ones recorded in other Texas markets such as Houston ($191) and Dallas-Fort Worth ($180). However, the latter two had much larger transaction volumes, exceeding $1.5 billion and $1.8 billion, respectively.

While Austin office transactions have been few and somewhat far in between this year, some deals still grabbed the headlines. Just last month, Arc Capital Partners bought a WeWork-anchored creative office in the city’s CBD. JLL arranged the transaction of the 100,166-square-foot building and also secured $39 million in acquisition financing from Grant Street Funding.

A newly built office complex

Riverside broke ground on the project at 1412 E. Fifth St. in 2020 and recently completed Centro South, while Centro North is expected to come online in the next few months, according to ReBusiness Online. The development team also included local landscape architecture firm Nudge Design and engineering company Big Red Dog.

Designed by Gensler, the Class A+, two-building office campus includes approximately 15,000 square feet of ground-floor retail and more than 800 below-ground parking spaces. The five-story buildings feature open-air terraces and meeting spaces, landscaped green areas, an on-site fitness facility, bike storage and electric vehicle charging stations.

Anchored by Australian software company Atlassian, Centro South was 96 percent leased at the time of sale. As of May, the Austin metro’s office vacancy rate dropped to 15.6 percent, 20 basis points above the U.S. average, CommercialEdge data shows.

The post AEW Buys Austin Office Campus appeared first on Commercial Property Executive.

Whisper 35. Rendering courtesy of Stream Realty Partners

Construction continues at Greystar Real Estate Partners’ Whisper 35, a Class A industrial development totaling 500,000 square feet in San Marcos, Texas, as the developer has broken ground on the second building of the project’s initial phase.

Whisper 35 Phase I includes two facilities encompassing 180,000 square feet. Greystar delivered Building 1 at 1225 Fortuna Road in 2021, while the 90,025-square-foot Building 2 is anticipated to come online by year-end. In late 2021, Synovus Bank provided an $18.8 million financing package to refinance Building 1 and to provide construction funds for Building 2, Hays County records show.

The second phase will consist of three warehouses totaling 314,938 square feet. Greystar expects to kick off construction next month and plans to deliver this addition by the third quarter of 2023. The development team also includes RC Page as general contractor.

READ ALSO: Industrial Market Pulling Ahead Despite Headwinds

While Building 1 is fully leased, Greystar selected Stream Realty Partners to market the upcoming facilities. Managing Director & Partner Sam Owen, Senior Vice President Adam Green and Vice President Mitchell Becker are part of the leasing team. After its completion, the firm will also serve as property manager for Whisper 35.

Whisper 35 is taking shape less than 1 mile from Interstate 35 and within 5 miles of San Marcos Regional Airport. Downtown Austin is some 27 miles away. Notable tenants in the area include Amazon, CFAN, a joint venture between GE Aviation and Safran Aircraft Engines of France, and Collins Aerospace, a Raytheon Technologies subsidiary.

San Marcos will also be home to the state’s largest virtual production, TV, film and streaming studio. Hill Country Group announced plans to build Hill Country Studios, a $267 million media park totaling 820,000 square feet.

Nearly 7.8 million square feet of industrial space were under construction in Greater Austin as of June, according to CommercialEdge information, with another 37.9 million square feet pertaining to planned and prospective projects. More than 1.1 million square feet were underway in Hays County, most of them expected to come online this year.

The post Greystar Expands Austin-Area Project appeared first on Commercial Property Executive.

Austin. Image by MJ Tangonan via Unsplash.com

Alliance Industrial Co. is kicking off construction on Kyle/35 Logistics Park, a Class A industrial park totaling 1.4 million square feet in the Austin suburb of Kyle, Texas. The developer is breaking ground on the speculative project this week, in partnership with Kyle Economic Development.

The developer has selected JLL to market the development, which is expected to come online in 2023. The leasing team includes Vice President Kyle McCulloch and Managing Director Ace Schlameus.

Kyle/35 Logistics Park will include one rear-load building and four structures with a cross-dock configuration with clear heights ranging from 36 to 40 feet:

• Building 1 – 224,240 square feet
• Building 2 – 474,397 square feet
• Building 3 – 347,180 square feet
• Building 4 – 206,262 square feet
• Building 5 – 140,300 square feet

All five logistics facilities will be equipped with ESFR sprinkler systems and are divisible, able to accommodate tenants seeking between 40,000 and 1.4 million square feet. Kyle/35 Logistics Park will have a total of 362 overhead doors, 16 ramps and ample parking with 1,273 spaces for cars, as well as 333 truck stalls.

READ ALSO: A Closer Look at Austin’s New Industrial Development

The business park will take shape on more than 100 acres along Interstate 35, some 27 miles southwest of downtown Austin. Austin-Bergstrom International Airport will be within 26 miles, while San Marcos Regional Airport will be some 6 miles away.

As of mid-June, 62 industrial projects totaling more than 8 million square feet were underway in metro Austin, CommercialEdge data shows. Most of these developments are expected to come online this year. The development pipeline also included 37.7 million square feet of industrial projects in the planning and permitting stages.

Recently, Titan Development announced plans for a megaproject dubbed Hutto Mega TechCenter in another Austin suburb. The 2.6 million-square-foot industrial park in Hutto, Texas, will include seven buildings.

In May, Stonelake Capital Partners broke ground on Georgetown Logistics Park, a business park totaling 620,000 square feet in Georgetown, Texas. The three-building speculative industrial campus is expected to be delivered in early 2023.

The post Major Austin Spec Project Breaks Ground appeared first on Commercial Property Executive.

The metro’s new-supply pipeline accounted for 11.7 percent of its total stock, representing nearly 7 percent of the nation’s total office space under construction at that time—bolstering Austin’s leading position across all U.S. markets in terms of relative stock. Nashville (8.6 percent) was second on the list, followed by Miami (7.1 percent) and Boston (5.5 percent).

More than two-fifths of all office space under construction in Austin is part of the downtown submarket. One of the most significant developments currently taking shape in the area is Sixth and Guadalupe, a nearly 1.2 million-square-foot high-rise. Developed by a partnership of Lincoln Property Co., DivcoWest and Kairoi Residential, the 66-story tower is set to become the tallest structure in the city.

In April, Lincoln Property and DivcoWest, along with partner Phoenix Property Co., announced that they will break ground on another office development in downtown Austin. The Republic will rise 48 stories and offer 833,000 square feet of office space. The announcement came on the heels of the partners securing the property’s anchor tenant, but the name of the company was not disclosed.

That same month, a joint venture of Carr Properties and Manifold Development also announced the upcoming groundbreaking of a 43-story high-rise in the CBD. Dubbed Block 16, the 738,000-square-foot office tower’s completion is set for 2026.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Office Development Still Strong appeared first on Commercial Property Executive.

The market’s average price per square foot in the first four months of 2022 reached an estimated $271 per square foot, one of the highest across Sun Belt cities, along with Phoenix ($322 per square foot), Charlotte ($259 per square foot) and Nashville ($254 per square foot). The national average price for office product in the same period reached $277 per square foot.

Among the Sun Belt markets, two metros exceeded $1 billion in office sales year-to-date through April, namely Dallas–Fort Worth ($1.3 billion) and Houston (1.2 billion). Charlotte recorded the lowest transaction volume, with a total of $143 million.

One of the notable deals that closed in April was the sale of 823 Congress, a 190,254-square-foot asset in Austin’s CBD. A partnership of DRA Advisors LLC and Pillar Commercial purchased the asset from New York-based Brickman. The transaction marks Pillar’s first buy in the Texas capital through its discretionary vehicle dubbed Pillar Real Estate Fund I. The 16-story property comprises a six-story parking structure, as well as 10,000 square feet of retail.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Investment Activity Still Slow appeared first on Commercial Property Executive.

Hill Country Studios. Rendering courtesy of Foley Design

Hill Country Group plans to develop Hill Country Studios, a media park totaling 820,000 square feet in San Marcos, Texas. Upon completion, the campus will be the state’s largest virtual production, TV, film and streaming studio and will provide more than 1,400 industry jobs.

The company intends to break ground on the $267 million project in April 2023. Phase 1A is slated for completion in 18 months from construction start, with two other phases to follow. Delivery is expected by mid-2025.

Hill Country Studios also has the local authorities’ support. On June 7, the San Marcos City Council approved a Chapter 380 agreement with Hill Country Group that will provide tax incentives for the multi-phase project. Under the terms of the agreement, at least 22 full-time positions must be created in 2024, a number that must double by next year.

If requirements are met, Hill Country Group will earn a tax deduction of 90 percent in 2025. The tax rebate payments will fall to 80 percent the next year and decrease by 20 percent each year, ending in 2030.

While Texas continues to draw tech companies, the Lone Star State is also home to 210 production companies as well as more than 130 animation, postproduction and visual effects companies, according to the Texas Film Commission.

Project specifications

Hill Country Studios will take shape on 209 acres at 6202 W. Centerpoint Road within the 2,400-acre La Cima master-planned community on the Interstate 35 corridor between Austin and San Antonio.

The TV and film production studio will include 12 soundstages totaling 310,000 square feet, two back lots offering a combined 15-acre, open-air production area as well as two virtual production stages, able to create virtual real-time sets.

Designed by Foley Design, the media park will also include 310,000 square feet of office space along with four workshops, post-production facilities and a 50-seat theater, as well as a restaurant and coffee shop.

Meanwhile, on the east coast, work began in May on Sylmar Studios, a 300,000-square-foot facility in Sylmar, Calif., 20 miles away from Hollywood. The $500 million facility will also include 12 soundstages along with a 120,000-square-foot office segment.

In February, LA North Studios signed a 70,550-square-foot lease for an office and warehouse space in Santa Clarita, Calif. The movie studio plans to convert the facility to sound stages as well as a production studio.

The post $267M Film Studio Coming to Austin Area appeared first on Commercial Property Executive.

Hutto Mega TechCenter conceptual master plan. Image courtesy of Titan Development

Titan Development is one step closer to developing Hutto Mega TechCenter, an industrial park totaling nearly 2.6 million square feet in Hutto, Texas. The developer has acquired a 188-acre site along Highway 79 for the project, which will be near the recently announced $17 billion Samsung semiconductor plant.

Joe Iannacone, Austin-based senior vice president at Titan, told Commercial Property Executive that Titan chose this particular site for the development to accommodate large users that some high-tech manufacturers in the area need.

The planned light industrial business park is set to include seven buildings, ranging between 168,480 square feet and 625,000 square feet, according to a conceptual master plan. Plans are not yet finalized, and the park could accommodate tenants seeking more than 1 million square feet as well.

Hutto Mega TechCenter will take shape roughly 5 miles from Samsung’s upcoming facility in Taylor, Texas, while downtown Austin will be 30 miles to the southwest.

Austin, a booming industrial market

Austin. Image by MJ Tangonan via Unsplash

In the past few years, Austin became a highly sought-after destination for tech giants.

“Hutto and the greater Austin area have already experienced incredible growth over the last few years as the demands of the high-tech manufacturing companies relocating to Texas are met by the skilled workforce already living here as well as an influx of skilled workers from other parts of the country and world,” Iannacone said.

Hutto Mega TechCenter is not Titan’s first development in the North Austin suburb. In 2017, the developer broke ground on Titan Innovation Business Park and completed it in less than three years. Now, work is underway on the 100-acre second phase of the industrial park, which will house tenants such as tenants Ovivo Inc. and Kval Inc., among others.

While speculative development has accelerated since the start of the pandemic, according to Prologis research, logistics users within the U.S. will run out of available space options in 16 months. Despite an increasing demand for space, developers are facing several headwinds. “The number one challenge is continued rising construction costs and supply chain delays,” Iannacone noted.

The post Titan to Build Austin-Area Megaproject appeared first on Commercial Property Executive.

Amazon delivery station. Image courtesy of Amazon

Amazon has paused development plans indefinitely for its distribution center in Round Rock, Texas, the Austin Business Journal first reported.

The $250 million project would have taken shape on a 193.3-acre portion of the Robinson Ranch, which also drew other tech companies, such as Apple, with its upcoming $1 billion campus totaling 3 million square feet on a portion of the 7,000-acre site.

Based on public records, the e-commerce giant purchased the site last November and submitted a Planned Unit Development (PUD) application to the city of Round Rock, which shows plans for a large-format warehouse and distribution center with building heights up to 120 feet.

Supply vs. demand

According to a recent earnings call, Amazon spent $61 billion in capital investment during the 12 months ending in March. Roughly 30 percent of that figure represented spending on fulfillment capacity, mainly fulfillment center warehouses.

“For the consumer business, as I said earlier, we currently have some excess capacity in the network that we need to grow into. So we’ve brought down our build expectations. I’d note again that many of the build decisions were made 18 to 24 months ago, so there are limitations on what we can adjust midyear. That said, we expect fulfillment dollars spent on capital projects to be lower in 2022 versus the prior year,” said Brian Olsavsky, CFO of Amazon, during the earnings call.

Meanwhile, other developers are drawn to the Austin suburb. In March, Link Logistics Real Estate submitted plans for Settlers Grove, a $38 million development in Round Rock. The four-building industrial park totaling 631,100 square feet has a 13-month development timeline.

In April, Sabey Data Centers announced plans for a two-building data center campus with a capacity of 72 megawatts in the northern suburb of Austin. The metro’s first hyperscale facility is expected to come online in early 2023.

Recently, Prologis introduced a new proprietary metric True Months of Supply (TMS), which attempts to measure more accurately the nationwide supply/demand dynamic of the logistics real estate sector. The latest TMS for the U.S. indicates that logistics users would run out of available space options in 16 months.

The post Amazon Pauses Development Plans in North Austin appeared first on Commercial Property Executive.

Across the Sun Belt, the Texas capital recorded the third lowest office vacancy rate that month, tailing Charlotte (14.5 percent) and Phoenix (15.1 percent), while other markets, such as Dallas (17.3 percent), Denver (17.5 percent) and Nashville (18.3 percent). The national average hit 15.7 percent in April, down 30 basis points year-over-year.

Among these cities, Austin had the highest average listing rate of $42.3 percent during the fourth month of 2022, down 2.5 percent since the same period last year. Other similar growth Sun Belt markets that held high listing rates that month was Charlotte ($32.3), Nashville ($30.6) and Houston ($30.5).

Across the Texas metro’s submarkets, Austin Northwest (25.7 percent), East (23.2 percent) and Southwest (17.3 percent) recorded the highest office vacancy rates. On the other side of the spectrum, Round Rock (5.2 percent), Austin Southeast (7.2 percent) and Cedar Park (9.8 percent) bore the lowest office vacancy rates.

One of the notable lease renewals that month was tech consulting giant Accenture’s 37,800-square-foot recommitment to one of Capital City Partners’ office properties in Southwest Austin. The five-building complex dubbed Monterey Oaks offers a total of 160,650 square feet and came online in 1998.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Office Vacancy Continues to Shrink appeared first on Commercial Property Executive.

While construction activity is still booming in the Texas capital, deals have slowed down in the first quarter of 2022. Among similar Sun Belt cities, Charlotte’s office transaction volume was also low in this period, with $99 million transacted in the first quarter.

At the other end of the spectrum, Dallas registered the second-highest office investment volume in the country year-to-date through March, with a total of $1.14 billion recorded. Deals in Houston also exceed the $1 billion mark. Other high-performing Sun Belt cities included Phoenix ($875 million) and Atlanta ($844 million).

Austin’s average sales price for office product in the first quarter of 2022 clocked in at an estimated $316 per square foot, lower than the 2021 average, which reached $441 at the end of December.

The biggest deal of the quarter was the $134 million sale of the Alpha Building in the master-planned community of Mueller Austin, Texas. Shorenstein Properties sold the roughly 210,000-square-foot, newly constructed building to the Teacher Retirement System of Texas. The tower represents the first piece of the four-building ensemble slated to comprise a total 800,000 square feet.

Another notable transaction that also closed in January was Walton Street Capital and Cypress Real Estate Advisors’ acquisition of Eastlake at Tillery, a two-building, Class A office complex. The LEED-certified property came online in 2021 and comprises nearly 177,000 square feet.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin Office Investment Lacks Momentum appeared first on Commercial Property Executive.

Image by dimitrisvetsikas1969 via pixabay.com

Stonelake Capital Partners has broken ground on Georgetown Logistics Park, a three-building speculative industrial complex totaling 620,000 square feet in the Austin suburb of Georgetown, Texas. The Class A distribution facilities will be built in a single phase and are expected to come online in March 2023.

In March, Wells Fargo Bank originated a three-year construction loan for the project, CommercialEdge data shows. The industrial park at 1800 Aviation Drive will include:

• a cross-dock building totaling 426,240 square feet with 40-foot clear heights as well as 82 trailer parking spaces
• a 123,200-square-foot shallow bay structure with a rear load configuration and 36-foot clear heights
• another rear-load building with 32-foot clear heights encompassing 70,300 square feet

The development team includes Powers Brown Architects and Pape Dawson Engineers heading the design as well as Zapalac Reed serving as general contractor. Stonelake Capital Partners selected JLL to market the property. The leasing team includes Managing Director Ace Schlameus, Vice President Kyle McCulloch and Associate Greta Reid.

The Georgetown industrial pipeline

Based on CBRE data, in the first quarter of 2022, the overall industrial vacancy across the Austin metro dropped to 4.1 percent. Georgetown led all submarkets when it came to development: 1.7 million square feet of industrial projects under construction, followed by the East submarket (1.5 million square feet) and the Far Northeast (1.2 million square feet).

Georgetown Logistics Park will take shape half a mile away from Georgetown Municipal Airport and within a mile of Interstate 35. The Austin suburb is also drawing other developers. In April, Titan Development continued the expansion of NorthPark35 Industrial Park, a 1.7 million-square-foot complex adjacent to the Stonelake project. Titan plans to deliver Building 5, totaling 297,057 square feet, in the last quarter of the year.

In March, Stonemont Financial Group acquired an 18-acre development site for Westinghouse35, an industrial spec project in Georgetown. The 230,000-square-foot building is expected to be delivered in 2023.

The post Stonelake Kicks Off Suburban Austin Spec Project appeared first on Commercial Property Executive.

The Texas Capital’s rapid expansion continued in the first quarter of the year. By the end of March, the office pipeline represented 11.5 percent of total stock, placing Austin ahead of all other U.S. markets for that metric. When factoring in planned stock to the under-construction pipeline, Austin’s figure reaches a whopping 25.3 percent of total stock—and is by far the best-performing market nationwide. Nashville is trailing the Texas Capital, with 8 percent and 15.4 percent, respectively.

By the end of the first quarter of 2020, Austin’s office pipeline consisted of 7.7 million square feet in the works. By then, the metro was already a leader with planned and under-construction stock representing 16.1 percent of total stock. The pandemic has fast-fueled this metro’s remarkable expansion.

First quarter highlights

As expected, there were several notable events within the development sector during the first quarter of 2022:

• 

  Image courtesy of Kilroy Realty Corp.

  In early February, Inspire Development broke ground on Pearson Ranch, a $2 billion mixed-use project in Northwest Austin;

• In March, Tishman Speyer and Ryan Cos. commenced construction on 321 West, a 561,000-square-foot mixed-use tower in the CBD;
• Los Angeles-based Kilroy Realty Corp. picked up a 2.9-acre site in the Domain submarket for $40 million, where it plans to develop a 19-story, roughly 493,000-square-foot office tower.

By the end of March, Austin’s office vacancy clocked in at 15.9 percent, down 10 basis points since the same period in 2021 and way up since March 2020, when it reached 7.4 percent. The average listing rate increased continuously since 2020, hitting $43.3 per square foot in March 2022.

Landlords completed several office leases in the first three months of the year:

• Social media giant TikTok Inc. signed a 125,000-square-foot sublease at 300 Colorado in the CBD;
• PacTrust inked two new leases at its Braker Pointe I & II office complex in Austin North, totaling 180,563 square feet;
• The Austin Stone Community Church signed a 37,362-square-foot lease at Highland Tech Center.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

The post Austin: Office Development Forged Ahead in Q1 appeared first on Commercial Property Executive.

Westview. Image courtesy of JLL

Arc Capital Partners has acquired Westview, a Class A creative office property totaling 100,166 square feet in Austin’s CBD. JLL Capital Markets represented the seller, Prescott Group, in the disposition of the six-story building.

JLL also helped secure acquisition financing for the buyer. Arc Capital Partners funded the purchase with a $39 million loan originated by Grant Street Funding, Travis County records show.

The property appraised for $53.9 million last traded in early 2016 when the current seller acquired it from the Texas State Teachers Association, which owned the building since its completion in the 1950s.

The JLL Capital Markets sales team included Senior Managing Directors Andrew Levy and Todd Savage as well as Managing Directors Kelsey Shebay and Jeff Coddington. The debt team was led by Senior Managing Director Jeff Sause, Managing Director Casey Wenzel and Analyst Matthew Ctvrtlik.

Updating a 1950s office asset in downtown Austin

Following the purchase, the current seller renovated and expanded Westview in 2018 into a LEED Gold-certified office structure, which offers floor-to-ceiling windows along with flexible floorplates. The redevelopment team included locally based contractor The Burt Group as well as Andersson Wise serving as architect.

Located at 316 W. 12th St., the creative office building is a city block west of the Texas State Capitol and has access to 2.9 million square feet of retail space in the vicinity and roughly 3,000 residential units, based on JLL data.

The multi-tenant building has one floor of office space located underground, a ratio of 1.00 parking spaces per 1,000 square feet and 2,531 square feet of retail space, CommercialEdge data shows. Tenant amenities include a rooftop terrace, a conference room, a fitness center and showers, a shaded courtyard, a cafe, an open-air space as well as bike lockers.

At the time of the sale, Westview was 93 percent leased. Based on CommercialEdge data, the tenant list includes WeWork occupying 46,410 square feet along with the Texas Association of Business and CTA Architects Engineers, among others. Recently, tech consulting giant Accenture renewed its lease at a 160,650-square-foot office complex in Southwest Austin.

The post Arc Capital Buys WeWork-Anchored Downtown Austin Office appeared first on Commercial Property Executive.

Work is underway at Alto, a 110,000-square-foot office project in the East Austin submarket, developed by a partnership between AQUILA Commercial and institutional investors advised by J.P. Morgan Asset Management. The Class A creative office, formerly known as 7th and San Marcos, is expected to come online in the fourth quarter of 2023.

“Austin continues to enjoy exceptional job growth in sectors that favor the sustainability proposition and modern functionality of first-generation office space. We believe this is still a very healthy segment of our market,” Ben Tolson, managing principal at AQUILA, told Commercial Property Executive.

Austin’s office pipeline continues to stay far ahead of all U.S. markets concerning relative stock. As of March, the Texas capital had 10.1 million square feet of office projects under construction, representing 11.5 percent of the total inventory, more than five times the national average of 2.2 percent, CommercialEdge data shows. The metro had an additional 25.3 percent of the total stock in various stages of permitting and planning.

Catering to a booming office market

The developers broke ground on the project in the first quarter of the year. In February, the joint venture secured a five-year, $42.7 million construction mortgage originated by First United Bank & Trust Co., Travis County records show.

Upon completion, Alto will occupy less than an acre at 924 E. Seventh St., the highest point in the East Austin submarket. The five-story office building will take shape atop four levels of underground parking offering a ratio of 2.7 spaces per 1,000 square feet. AQUILA Commercial will handle leasing in-house with a team including Tolson as well as Associate Cody McCrary.

Designed and constructed by The Beck Group to target LEED Silver certification, the property will feature a corner patio, which will house a restaurant, two private balconies on the second and fifth floors, as well as indoor bike storage. Alto will also include a studio and gallery dubbed Make.Believe, a platform for local artists that will also serve as a collaborative work area.

Alto will have easy access to Interstate 35, while downtown Austin will be roughly a mile away. In April, a partnership including Lincoln Property Co., Phoenix Property Co. and DivcoWest moved forward with the development plans for The Republic, an office tower totaling 833,000 square feet, which will rise less than 2 miles away.

The post Work Underway on East Austin Office Project appeared first on Commercial Property Executive.

Monterey Oaks. Image courtesy of AQUILA Commercial

Capital City Partners has signed a lease renewal with tech consulting giant Accenture at its office complex in Southwest Austin. The tech company will continue to occupy 37,800 square feet of office space at the five-building complex, which has a total of 160,650 square feet.

Located on more than 18 acres at 5700 S. Mopac Expressway, the single-story Monterey Oaks office park was built in 1998 and is home to Texas Windstorm Insurance Association and chemical science company Sachem Inc., among other tenants, according to CommercialEdge.

READ ALSO: Office Leasing Strategies for the New Landscape

Terms of the lease renewal were not disclosed, however, the firm last renewed its lease 5 years ago, according to a press release from 2017. Last month, Accenture publicly released its second quarter financial results, which showed the company’s revenues at $15 billion, a 24 percent increase from the same time period last year.

AQUILA Commercial’s Managing Principal Chad Barrett represented the landlord in the lease deal, while CBRE Senior Vice President Marc Vanderslice worked on behalf of the tenant.

As of March, the office vacancy rate across Greater Austin jumped 50 basis points month-over-month coming to 15.9 percent, in line with the national average, CommercialEdge data shows. In the same month, AQUILA represented Kimley-Horn in extending its lease at Campus at Arboretum totaling 317,920 square feet in the city’s Northwest submarket. In February, Ferrovial Services inked a deal to occupy 11,575 square feet of space at the same office building.

The post Tech Giant Accenture Renews Austin Lease appeared first on Commercial Property Executive.

JLL Capital Markets marketed the property on behalf of the sellers, Ledo Capital Group, of Los Angeles, and St. Clair Commercial Real Estate. JLL will continue to handle leasing of the project for the buyer.

Innovation Business Park I & II. Image courtesy of CenterPoint Properties

The property was built in 2019 and 2020 using concrete tilt-wall construction. Ledo acquired the first, then newly completed, partially leased distribution building of 148,000 square feet and structured a forward commitment on an adjacent parcel to develop the second building, a speculative 212,000-square-foot cross-dock distribution facility, bringing the property to its current configuration.

READ ALSO: A Closer Look at Austin’s New Industrial Development

The buildings, at 1050 and 1070 New Technology Blvd., feature clear heights ranging from 30 to 32 feet, 96 dock-high doors, a shared 200-foot-deep truck court, 536 parking spaces and ESFR sprinkler systems.

The property is currently leased to Western Industries, Three Way Logistics and Barnsco.

The 20-some-acre park is on the northeast corner of the U.S. 130 and State Highway 79 intersection, close to State Highway 45 and I-35, providing both north-south and east-west connectivity.

The JLL Capital Markets Investment Sales and Advisory team that represented the seller was led by Trent Agnew, Dustin Volz, Dom Espinosa, Josh Villarreal and Matthew Barge.

The JLL Leasing team responsible for leasing the project consists of Ace Schlameus and Kyle McCulloch.

Set through 2023?

CenterPoint made its first industrial acquisition in Austin just this past December, purchasing a low-coverage infill distribution facility at 3830 Promontory Point. The 6-acre property currently has just 68,427 square feet of coverage.

Earlier this month, Titan Development broke ground on a nearly 300,000-square-foot fifth building at its NorthPark35 Industrial Park, in Georgetown, Texas.

The Austin industrial space market continues to enjoy strong tenant demand, which has pulled overall vacancy down to a 20-year low of 2.9 percent, according to a first-quarter report from JLL. Further, there’s enough demand, especially from advanced manufacturing and automotive companies, to soak up the more than 10 million square feet of deliveries anticipated over the next two years.

The post CenterPoint Buys Suburban Austin Industrial Park appeared first on Commercial Property Executive.

823 Congress. Image courtesy of Newmark

A joint venture between DRA Advisors LLC and Pillar Commercial has acquired 823 Congress, an office property totaling 190,254 square feet in Austin’s CBD. The seller was New York-based Brickman, according to CommercialEdge data.

Newmark Vice Chairmen Chris Murphy, Robert Hill and Gary Carr as well as Director Chase Tagen represented Brickman in the transaction, which marks Pillar’s first acquisition in metro Austin through its discretionary vehicle dubbed Pillar Real Estate Fund I.

In January, the same team worked on behalf of Pillar in the purchase of One Preston Centre, a 76,741-square-foot office building in Dallas. Meanwhile, another Newmark team including Vice Chairman David Milestone, Senior Managing Director Brett Green and Director Josh Francis secured acquisition financing for the new owners.

A multi-tenant office building in downtown Austin

Located on less than an acre at 823 Congress Ave., the property also includes a six-story parking structure at 900 Brazos St. as well as 10,000 square feet of retail space. The 16-story office building offers floorplates ranging between 11,240 and 12,049 square feet, along with 207 parking spaces at a ratio of 1.21 spaces per 1,000 square feet.

Brickman upgraded the 1970-built property by investing $15 million in capital improvements, which added a new conference room, a tenant lounge, as well as a fitness center equipped with showers, among other amenities.

The partnership plans to continue repositioning the asset, which was 71 percent leased at the time of the sale. The tenant roster includes a wide variety of companies, such as Industrious, Texas Pharmacy Business Council and Hillco Partners, CommercialEdge data shows. As of March, the average office vacancy rate across the Austin market increased by 50 basis points month-over-month, reaching 15.9 percent, on par with the national average, according to the same data provider.

The office building is a few blocks away from the Texas Capitol and Waterloo Park. Recently, Lincoln Property Co. teamed up with Phoenix Property Co. and DivcoWest to develop The Republic, an office tower totaling 833,000 square feet less than a mile away. The Austin metro continues to lead the nation for office construction activity relative to total stock. Based on CommercialEdge data, as of March, more than 10 million square feet of office projects were under construction, representing 11.5 percent of overall inventory.

The post DRA Advisors JV Buys Downtown Austin Tower appeared first on Commercial Property Executive.