Hartland Plaza is a four-story office building near Downtown Austin. Completed in 1987 and renovated in 2020, the building consists of 180,000 square feet of Class A office and retail space.
When the current owners purchased Hartland Plaza from Lake Austin Commons in 2015, AQUILA’s Property Management team retained the management assignment.
The current owners had an aggressive capital improvement schedule spanning over the next 10 years, with the majority planned for the first six years.
The planned capital improvements included:
- Corridor upgrades
- Addition of secured parking by way of parking arms
- Replacing/repairing mechanical equipment
- Elevator modernization
- Combining adjacent spaces
- Painting of the bridge across Fifth Street
- Adding Tenant lounge/relocating the conference facility
- An upgraded fitness center with state-of-the-art equipment and enhanced locker room and showers
Hartland Plaza’s overarching goal was to increase (and ultimately stabilize) income in the long term and these capital improvements would pave the way for this.
Reaching Ownership’s Goals
To execute Hartland Plaza’s aggressive capital improvements schedule, we reviewed their 10-year plan internally and made very detailed recommendations to ownership on how to proceed. Ownership reviewed these recommendations and began enacting their plan.
Part of these improvements included the securitization of the parking garage. Our team brought in a third-party operator to operate and secure the garage. Our team met with all existing tenants and transitioned everyone into using the new system and ensured proper education for the new system.
Initially, the building was leased by a large number of small tenants. Our property management team worked with AQUILA’s leasing team to combine smaller suites to create larger office spaces for larger tenants. This allowed us to recruit, larger, credit-worthy tenants.
In addition to combining the spaces and capital improvements, our team worked to retain current tenants and gain new tenants. From 2018 to 2020, approximately half of the leases in the building (roughly 90,000 square feet) were expiring. AQUILA’s Property Management worked closely with AQUILA’s leasing team in order to understand what tenants wanted in the building and we made sure to regularly meet with tenants on a semi-annual basis and learn what their needs were. This led to the aforementioned capital improvements and added amenities.
We also worked closely with both AQUILA’s leasing team and tenant representation brokers on renewals and backfilling empty spaces. AQUILA’s marketing team created virtual tours of available suites as well as the new amenities. With collaborative efforts among AQUILA’s teams, we were able to quickly and efficiently execute strategies to not only retain the current tenant base but also attract new tenants. As a result of our efforts, occupancy rose from 87.7% in 2019 to 89.7% in 2020. We also were able to achieve high KingsleySurvey scores during and after this period.
Additionally, after implementing several energy-saving measures (LED lights, HVAC programming, etc), Hartland was able to achieve an ENERGY STAR score of 98. The building’s score has managed to stay above 95 for the past five years with a current score of 97.
AQUILA’s property management team increased revenue for ownership significantly with the addition of monetized parking, upgraded building systems, and amenities which enabled the recruitment of larger and higher credit new tenants. Our team also met the owner’s goal of increasing the credit profile of the asset, individual tenant footprints, and long-term stabilization of revenue.
Ultimately, through AQUILA’s management, and collaborative efforts among internal teams, Hartland Plaza achieved and exceeded the financial goals that were set by the owners when the building was purchased. The leasing and property management teams were able to work together to push rental rates, which helped classify the building as the Class A product it is today.