National REIT acquires huge office development in Southwest Austin

May 27, 2014
Austin Business Journal

In a deal that largely took place under the radar, San Antonio-based Koontz McCombs has sold the land and development rights to Encino Trace, a 320,000-square-foot Austin office complex under construction on Southwest Parkway

The acquisition was revealed in the first quarter 2014 earnings report for Brandywine Realty Trust (NYSE: BDN). The Radnor, Pennsylvania-based real estate investment trust paid $14 million for the 54-acre development site near South MoPac Expressway and State Highway 71

Construction is ongoing and it appears that Koontz McCombs Construction is the general contractor

The first building in the complex, which is 159,000 square feet, has been 75 percent preleased by an unidentified anchor tenant. That building should be completed in the second quarter of 2015 at a cost of $43.6 million. There is no timeline for the second building. About 1,375 parking spaces are included in the plan

The properties will be part of a larger Austin portfolio that Brandywine owns in partnership with DRA Advisors LLC of New York

In a conference call to investors, Brandywine President and CEO Gerald Sweeney alluded to the lease signed for the first building at Encino Trace

“We did not actually name the tenant yet. There will be a press release forthcoming on that, but it’s an existing tenant in one of our other buildings that’s essentially doubling in size and we are layering some backfill strategies for their space ... ,” Sweeney said. “Look, the leasing pipeline in Austin remains incredibly robust with continued upward pressure on rents.”

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