Retail is a bright spot for commercial real estate – both across the country and in a few submarkets. Austin is one of those hotspots and Inland Western Real Estate Trust Inc. is ready to take advantage. The retail-property firm just purchased 1890 Ranch in Cedar Park, an Austin suburb, for $97.6 million.
Speaking to Commercial Property Executive, Shane Garrison, CIO of Inland Western, was bullish on the Texas market in general. “Texas, overall, continues to perform well relative to the U.S. average in terms of affordability and consumer spending habits,” he said. “We chose Cedar Park because of its relatively low unemployment rate, strong public sector, robust and growing medical sector and strong tech base.”
A recent report by services firm Marcus & Millichap shows a similar outlook for the city. “Job growth in Austin will once again surpass the national average this year, which, combined with limited retail construction and stronger leasing activity, will place moderate downward pressure on vacancy rates,” the report noted. “Austin retail vacancy will decline 20 basis points in 2011 to 9.1 percent, as new supply falls to a 19-year low and leasing activity accelerates. During 2010, the vacancy rate in the metro declined 30 basis points.
The 486,896-square-foot shopping center was purchased from RioCan Real Estate Investment Trust, and is anchored by national stores including PetSmart and Cinemark, and is shadow-anchored by Target.
“At approximately 94 percent occupied, we feel there is still upside in the asset due to the opportunity to increase occupancy through our numerous national and local tenant relationships,” Garrison said. “Additionally, [seller] Endeavor Real Estate Group will continue to work with us at the local level to lease up the property.”