A recent article in the Austin Business Journal called the Austin commercial real estate market hot and cited several industry insiders. We agree – commercial real estate in Austin is on the come-back trail. Vacancies across market types continue to tighten, investor interest is at a fevered pitch, and the market is poised for the next development cycle.
The ABJ reported that “Some 111 properties traded hands in 2012, and the market continues to be strong with off-market transactions accounting for 25 percent of recent sales. Nearly 40 percent of all of 2012’s deals were transacted in fourth quarter.” The article cited four recent investment sales – three by national and international companies and the fourth by a regional player. …Read Entire Post
Source: NAI REOC Austin
After displaying a tremendous rebound in 2012, the Austin industrial market is off to a measured start in 2013, according to the survey of more than 37 million square feet of industrial lease space. To recap, the total annual amount of industrial space absorbed topped two million square feet last year but roughly 345,000 square feet of that amount was attributed to short-term leases.
The lifespan of some of those short-term commitments expired in the first three months of this year which returned vacant space to the market and worked to slow the pace of growth. As a result, the local industrial market experienced 141,372 square feet of negative absorption in the first quarter which increased the citywide vacancy rate slightly to 13.2% compared to 12.9% last quarter. Vacancy, however, is down significantly compared to 17.4% recorded in the same quarter last year. …Read Entire Post
Bank of America Tower
The sale of Bank of America Tower, which has been in the works since last fall, is about to close, according to an article released by the Austin Business Journal. Dallas-based Stream Realty is set to purchase the 26-story downtown tower located at 515 Congress Avenue which has been owned by T. Stacy & Associates. The sale price was not disclosed but the property is valued by the Travis Central Appraisal District at more than $70 million. …Read Entire Post
Seaholm Power Plant
The papers are signed. The City of Austin has conveyed the Seaholm Power Plant on the southwestern edge of downtown to Seaholm Power, LLC – the developer who has plans to redevelop the property into a $100-million mixed-use project. The beloved landmark, sitting on five acres of prime waterfront property, will be converted to 60,000 square feet of office space that will feature a plaza and green space open to the public. In addition, the construction of a two-story retail building is expected to be complete by next summer which will be anchored by California-based specialty grocer Trader Joe’s. Construction of a 30-story apartment building featuring approximately 300 units will take about 30 months to complete. …Read Entire Post
323 Congress Ave.
Three historic downtown buildings, commonly known as the Swift Building, the Day Building and the McKean-Eilers Building, were recently purchased by local investment group Cielo Realty Partners. The three buildings, which date back to the late 1800’s, are located at 315, 319 and 323 Congress Avenue and span roughly 46,000 square feet. …Read Entire Post
In a nod to Austin’s promising economic future, Austin-based Endeavor Real Estate Group and Granite Properties plan to start construction soon on a 220,600-square foot office campus in northwest Austin — the first major office project to launch in the area in almost five years.
Champion Office Park is slated for the northwest corner of RM 2222 and Capital of Texas Highway (Loop 360). The project will have two four-story buildings, one with 116,800 square feet and the other with 103,800 square feet, Endeavor officials told the American-Statesman. …Read Entire Post
Economic expansion and job growth will drive recovery as interest rates rise. Recovery in the housing market augers for continued improvement in U.S. commercial real estate over the next two years.
Despite challenges – including gradually rising interest rates and government spending cuts – the outlook for commercial real estate is positive. The U.S. economy is expected to grow by 1.9% in 2013 and accelerate to 2.8% in 2014. This growth will spur the creation of 4.8 million jobs over the next two years. As job growth accelerates, so too will demand for commercial real estate, leading to continued improvement in vacancy rates. …Read Entire Post
Cap rates for the single tenant net leased market remained near historic lows for retail, office and industrial sectors in the first quarter of 2013. Cap rates for net lease office and industrial properties declined while retail cap rates remained at 2012 fourth quarter levels.
Regardless of the decline in cap rates for office and industrial properties, net lease retail properties remain priced at a 45 and 77 basis point premium over office and industrial properties respectively. Properties occupied by credit tenants with long term leases experienced the greatest compression in the first quarter of 2013. …Read Entire Post
A recent Commercial Property Executive article featured the recent KBS Strategic Opportunity REIT purchase of the Austin Suburban Portfolio, a group of three office properties totaling 518,000 square feet. The REIT purchased Park Centre (203,200 sf), Westech 360 (175,500 sf) and Great Hills Plaza (139,300 sf) from TPG/CalSTRS Austin L.L.C., a joint venture involving Thomas Properties Group Inc. and pension fund CalSTRS, for a reported $76 million.
Commercial Property Executive asked NAI REOC Austin’s Bob Rein to weigh in on the activity. Rein believes that recently announced corporate relocations and expansions along with a booming high-tech sector are driving demand for office space. …Read Entire Post
Governor Rick Perry recently cited a report released by the Brookings Institution – the latest to highlight the Lone Star State’s strong jobs climate. The report found that Texas leads the nation in job creation with Austin, Houston, Dallas, San Antonio, Dallas and McAllen creating more jobs now than before the recession. According to the report, Austin saw the highest percentage increase in jobs of any city in the nation. …Read Entire Post