A number of commercial properties traded hands in 2018, from multifamily towers to single-tenant office campuses.
Commercial real estate investors include both prominent local firms and national and international institutions.
In this article, we highlight the details of the five most significant property sales of 2018, including size, price, location, buyer and seller.
5. Lantana Ridge
Size: 175,000 SF
Price: $64.4 million ($368.00/SF)
Seller: Lincoln Property Company
Buyer: Ramrock Real Estate, LLC
In the 2Q 2018, Lincoln Property Group sold the 175,000-SF, two-building complex Lantana Ridge, to Ramrock Real Estate, LLC. HFF helped market the property for Lincoln Property Company and secured the buyer.
Lantana Ridge is located in southwest Austin, along Southwest Parkway between Barton Creek Boulevard and William Cannon Drive.
The property delivered in 2017 and is home to the YETI Coolers headquarters. YETI, the only tenant in the buildings, signed a 10-year, 175,000-square-foot lease on the space.
The buildings include amenities that fit YETI’s outdoor lifestyle brand and include an archery range, outdoor basketball courts, barbecue pits, a rooftop terrace and a jogging trail.
4. 3M Austin Center
Size: 1.18 million SF (156 acres)
Price: $86 million ($72.90/SF)
Buyer: World Class Capital
One of the largest sales in terms of size came in the first quarter of 2018 when 3M sold its 156-acre campus for $86M to World Class Capital.
The 1,179,741-SF campus is located northwest Austin near the intersection of RR 2222 and FM 620.
Although this sale was one of the largest in size, it was also one of the lowest in price per building square feet at just $72.90. At $86M, this equates to $12.66 per land foot based on 156 acres.
This sale comes as 3M plans to move into the Parmer Innovation Center, a development in northeast Austin along Parmer Lane, just east of IH-35. The Parmer Innovation Center is home to a number of Fortune 500 companies, including Home Depot and GM.
3M’s new 272,000-sf office will be “state of the art” says Lori Anderson, a spokeswoman for 3M.
3M will leaseback its current office space from World Class Capital until the delivery of its new office building in 2Q 2018.
3. Las Cimas II & III
Size: 313,715 SF
Price: $108 million ($344.26/SF)
Seller: GLL Real Estate Partners
Buyer: Rockpoint Group LLC
Las Cimas II & III was sold by GLL Real Estate Partners to Rockpoint Group LLC for $108 million in 3Q 2018.
HFF announced the sale and represented GLL in the transaction. In addition, Wells Fargo provided the loan with support from HFF.
The two Class A office buildings total 313,715 SF and feature appealing square floor plans and views of the hill country and downtown skyline. The property is located in southwest Austin near the intersection Capital of Texas Highway and Bee Caves Road.
The buildings were 90% leased at the time of the transaction; tenants include Whole Foods, Jones Energy and Tesla Motors.
GLL purchased the building in 2013.
GLL was one of the first international real estate institutions to see potential in the suburban Austin office market, and we’ve been validated in our view by seeing tremendous growth throughout the Austin market over the last five years.”
– Christian Goebel, Executive Vice President, GLL
Goebel continued on to say that Las Cimas II & III are “…high-quality office buildings with strong cash flow.”
2. Stonebridge Plaza I & II
Size: 388,024 SF
Price: $161 million ($415.00/SF)
Seller: KBS Realty Advisors
Buyer: Intercontinental Real Estate Corporation
This pair of Class A office buildings traded hands in one of the most expensive transactions of the year.
KBS Realty Advisors sold Stonebridge Plaza I & II to Intercontinental Real Estate Corporation for $161,029,960 ($415/SF) in August 2018.
The two-building, 388,024-SF property is located at 9606 N. MoPac Expy., just outside of the Domain.
The property has been fully leased for the past 18 months, with three Fortune 500 tech companies occupying over 200,000 SF (or 54%) of the total property. Tenants include Qualcomm, MHNet and GTT Communications.
These numbers, along with the desirability of the location, prove the strength of the property and help explain why it received its offer price.
Size: 52,000 SF Office & 439 Multifamily Units
Price: Undisclosed (estimated $325 million or $513/SF)
Seller: Trammell Crow
Buyer: American Realty Advisors
American Realty Advisors, an institutional fund manager based out of Los Angeles, purchased Northshore from Trammell Crow in Q3 2018.
Although the price was undisclosed, it was expected to sell for around $325 million, making it the most expensive transaction of the year.
Northshore’s 539 apartments are almost completely occupied and its 52,000 SF of office and retail space are 100% leased. Office tenants include Galvanize and Digital Turbine, and retailers include Torchy’s Tacos, Le Politique and ATX Cocina.
Austin Maddux, an executive vice president of American Realty Advisors believes Austin’s “rapidly expanding urban market…is poised for long-term growth.” Maddux believes that this building location can take advantage of the cities job growth downtown, which seems likely given the expansion and huge leases recently signed on the West 2nd Street Corridor.
Additionally, this high price may be due to the limited amount of multifamily project in the development pipeline for downtown, a contrast to the abundance of office developments in the pipeline. If these development trends continue, multifamily units and developments may become increasingly pricey due to job growth but limited housing in the area.
In 2018, we saw a continued influx of national and international commercial real estate buyers investing in the Austin market, from American Realty Advisors with offices around the country to the Azrieli Group headquartered in Israel.
This, as well as the continued success of the city’s real estate market, is likely to continue to drive sales prices over the next year and beyond.
For a full list of commercial property sales that took place in the last quarter, download your free copy of our latest office market report.
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