posted on August 06, 2010 09:00
In one of this year’s biggest investment deals, a six-building office campus in South Austin has been sold to a new investment partnership in its first of more expected land purchases in Central Texas, brokers working on the deal said.
CB Richard Ellis announced Friday that Austin Hwy 71 Realty Ltd., an investment partnership led by Houston-based Braun Enterprises, had acquired the 154,000-square foot space at 706 Ben White Blvd. and 4005 and 4009 Banister Lane. Wilmington, N.C-based Pharmaceutical Product Development Inc., a public company that does pharmaceutical drug development, leases less than half the space. The rest is unoccupied.
The campus represents not only the partnership’s first acquisition in Austin, but a “tremendous opportunity” to reposition the complex with a new name and significant capital improvements, the investors said in a statement.
Planned renovations, scheduled to begin this fall, include interior remodeling of move-in ready “spec suites” that cater to small and mid-size tenants. Leasing efforts will focus primarily on tenants requiring less than 10,000 square feet of space and whose business owners live in or near South Austin.
“We have a great deal of experience and have been extremely successful with this type of project in the past,” said Dan Braun, owner of Braun Enterprises, who represented the partnership in the purchase. “We hope to quickly stabilize the asset and make it stand out as a premier office complex in the South Austin landscape.”
The seller, a national investment management company, was represented by Todd Mills, Scott Herbold and Greg Marberry of CBRE in the transaction.
The deal, which closed July 15, is Braun Enterprises’ fourth acquisition of 2010. They intend to acquire additional assets prior to the end of the year, with some in Austin.
“We definitely see this as the first of many acquisitions in the Austin market,” Braun said. “This acquisition fits in well with our portfolio and, given our propensity to buy and hold, we see Austin as a tremendous place for long-term investment.”
The deal is the largest of its kind in Austin and South Austin in the latest economic downturn, particularly when it comes to institutional investment in office properties. It’s also a sign that real estate investors in all markets from office to industrial continue to see Austin as a great market to invest in despite some high vacancy rates dotting the region.
The industrial market, as reported by the Austin Business Journal earlier this month, has shown some promising activity despite having the state’s highest vacancy rate. One portfolio of industrial properties sold and another one is under contract — totaling $83 million and about 1 million square feet despite having the state’s highest vacancy rate.
California-based PS Business Parks Inc. acquired a portfolio of 13 single-story buildings throughout Austin totaling 704,000 square feet for $42.9 million in an all-cash transaction in late April.
Currently, CB Richard Ellis brokers, who represented seller UBS in the PS Business Parks deal, said they are under contract with an out-of-state investor to sell a 384,000-square-foot portfolio for $40 million at Stonehollow Business Center in North Austin. Jack Fraker, Greg Marberry and Josh McArtor are working on both deals, whose total square footage is as big as Highland Mall.
Austin Business Journal | July 30th, 2010 | by Francisco Vara-Orta