Austin Market Update: Texas Capital Lures Outside Investors
The Texas capital had a banner year for investment and is now the priciest market among Sun Belt cities.
In 2021, office deals in Austin amounted to $1.9 billion, according to CommercialEdge data. Investment activity has significantly expanded year-over-year, as total sales volume in 2020 reached only $175 million.
Last year, nearly 9.5 million square feet of office space traded within the metro. The Texas capital has also increased its average sale price since the end of 2020, when it averaged at $292 per square foot. In 2021, the metro’s average price rose to $441 per square foot, easily outperforming other Sun Belt cities, such as Charlotte ($358), Dallas ($245), Phoenix ($236) and Atlanta ($216).
One of the last and largest deals to close in 2021 was Beacon Capital Partners’ purchase of One American Center, a more than 500,000-square-foot office building in downtown Austin. CalSTRS sold the 32-story downtown asset after a roughly 16-year-old ownership. Dating back to the 1980s, the building at 600 Congress Ave. is LEED Gold certified.
Top dollar deals
Austin had banner year for investment, attracting top players, such as Amazon, Samsung and Tesla. During 2021, several high-priced deals closed within the metro, including the sale of its tallest office tower. Los Angeles-based Kilroy Realty purchased the newly delivered, 730,000-square-foot Indeed Tower for $580 million, from its original developer, Trammel Crow.
Washington, D.C.-based Carr Properties also made its entry into the Austin market last year, with the purchase of a 22-story downtown tower. Former owners MetLife Investment Management and Invesco sold the 420,000-square-foot office property for an undisclosed amount, but the asset has an assessed value of $292.8 million.
In the last month of the year, Cousins Properties closed on two office deals within the CBD. The company, which has been restructuring its portfolio, sold its 816 Congress tower for $174 million, following a nearly decade-long ownership. Cousins also purchased the remaining stake in the 32-story 300 Colorado building from its partner, for $162.5 million.
CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.
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