Alliance Abroad, an existing AQUILA client, who was leasing space in southwest Austin, approached AQUILA with the desire to relocate to the trendy East Austin neighborhood. They ideally wanted to find a location where they could have a purchase option at the property in which they would ultimately sign a lease.
After scouring the market, AQUILA found that there were very limited options in the desired location at the tenant’s required size that would be delivering in time to coincide with the firm’s current southwest Austin lease expiration.
A Multitude of Stakeholders
It was eventually determined that Eastside Village, a mixed-use development that was under construction at the time would best meet the client’s needs. This transaction was complicated by the fact that the development had multiple investors and equity partners including Transwestern, the developer, and C3 Presents, who was also a tenant in the building that AQUILA had previously represented in their transaction.
An Off-Market Investment Opportunity
While the project itself was no secret to the market, the option to purchase the property was, as the ownership group had not considered selling the office building prior to completion until approached by AQUILA/Alliance Abroad. Without AQUILA utilizing its relationships with the building ownership while also leveraging Alliance Abroad’s potential tenancy in the building, this transaction would not have occurred.
An Initial Investment
Once AQUILA successfully obtained a purchase right on the building, AQUILA sourced third-party guarantors and equity partners to form a partnership with Alliance Abroad. This partnership then exercised its purchase option for the office portion of the development. Transwestern and C3 achieved a recognizable profit from this transaction.
While the building was still under contract, the Alliance Abroad partnership assigned the contract to CIM Group for a fee. CIM, an institutional real estate investor out of California with $19B+ in AUM, was looking to grow its presence in Austin. This achieved a recognizable profit for Alliance Abroad and the partnership. Additionally, AQUILA used the Alliance Abroad partnership’s control of the building as leverage when negotiating with CIM in order to negotiate more favorable lease terms for Alliance Abroad than had initially been agreed-upon by the original ownership group.
Despite having to balance the interests of multiple clients throughout the transaction, AQUILA was able to navigate the deal in such a way to produce positive results for all parties involved.