It has been a slow year for office property sales in Austin due to COVID-19 and the uncertainty it has caused. However, a few notable office projects did trade hands in 2020.
In this article, we highlight the four largest office building sales in Austin, Texas.
5. Cross Park Center
Size: 91,568 sf
Address: 8317 Cross Park Dr.
Barton Smith purchased this northeast office building from DuPont Group for an undisclosed price in 1Q 2020. The property was 100% leased at the time of sale. Texas Health and Human Services Commission is the primary tenant.
Cross Park Center was built in 1985 and is located just north of the US-183 and US-290 intersection in northeast Austin.
4. 7000 West at Lantana Bldgs 1 & 2
Size: 136,075 sf
Address: 7000 W. William Cannon Dr.
According to Cushman & Wakefield’s press release, the buildings’ R&D/lab components make them particularly unique.
As the Southwest Parkway corridor has matured, these assets have evolved into semi-specialized buildings with significant R&D lab components. [Commercial real estate] investor and tenant demand, alike, remain strong for specialized office/lab product like 7000 West.”
– Mike McDonald, Vice Chairman, Cushman & Wakefield
7000 West at Lantana was built in 1999/2000 and is located near the intersection of Southwest Parkway and West William Cannon Drive.
3. Parmer Austin – 3M Buildings
Size: 335,825 sf
Address: 13011 McCallen Pass and 507 E. Howard Lane
PRP Real Estate Investment Management, in conjunction with KFH Capital and GMF Capital, purchased two buildings from Karlin Real Estate for $145 million in 1Q 2020. The buildings, a 204,400-sf office building and a 131,425-sf lab building, are a part of the Parmer Austin development and are fully occupied by 3M on a 14.5-year lease.
The 3M [commercial real estate] investment is our first [commercial real estate] investment in the Austin market for PRP’s corporate net lease platform. We remain incredibly bullish on the positive fundamentals for this sector given the myriad of [commercial real estate] investment opportunities available to us.”
– Paul Dougherty, President of PRP.
3M moved into the buildings last summer and employs roughly 500 employees at the location.
The 300-acre Parmer Austin business park was, and continues to be, developed by Karlin Real Estate. Other buildings within the project are leased to several other big-name tenants, including Apple, General Motors, The Home Depot and Facebook.
2. Tracor Campus
Size: 539,000 sf
Address: 6500 Tracor Lane
Karlin Real Estate purchased BAE Systems’ Tracor Campus for an undisclosed price in 3Q 2020. BAE will continue leasing its space until construction of its new campus at Parmer Austin is complete in 2022.
Karlin has yet to release details on what it plans to do with the campus, but some form of redevelopment is likely in the cards. The property is roughly 140 acres and located along US-183 in East Austin.
Redevelopment will be our focus, but it’s premature to comment on our plans for the site. We are excited about the opportunity, particularly in light of Tesla’s campus announcement nearby.”
– Mark Emerick, CBRE Senior Vice President, Karlin’s broker
Karlin has been very active in the Austin real estate market, including its development of Parmer Austin and several notable purchases in recent years.
1. Tech 3443
Size: 1,034,373 sf
Address: 3443 Ed Bluestein Blvd.
Romspen Investment Corporation purchased Tech 3443 through a bankruptcy auction in 4Q 2020. Romspend, previously the project’s lender, bid $45 million for the five-building, 109-acre property. 3443 Zen Garden LP, an entity managed by Canadian Businessman Dan White, was the project’s previous owner.
Tech 3443 is located on the site of Motorola’s old campus in East Austin. Following a rezoning approval granted by the Austin City Council in November 2020, Romspen plans to develop a mixed-use campus on the site. The new zoning now allows for roughly 4.8 million sf of development.
Plans for Tech 3443, also previously called Eightfold and Austin Viie, have seen several iterations through the years and been met with a series of delays. However, with the new zoning approvals development might begin to move forward in 2021.
Despite the decrease in sales activity compared to recent years, Austin’s office development pipeline and recent large lease transactions are an indication that commercial real estate investors and tenants are still bullish on Austin’s office market. It will be interesting to see how sales volume fares in 2021.