Hines' National Office Partners LP, a joint venture with CalPERS, is the official owner of a high-rise prize situated just blocks from the state capitol building. "We're excited to be back, to be an owner again in the Austin CBD," says Travis Overall, vice president for the Houston-based Hines.

The location and value add from the 15.3% vacancy were the dealmakers as was the city's lifestyle demographics. "There is some vacancy. There is obviously going to be some roll," Overall tells GlobeSt.com. "We think it's a good opportunity to buy because we think rental rates are going to be increasing." The office building's going rental rate is being kept under wraps, but CBD class A space, on average, is fetching $32.13 per sf. The 22-story building's largest contiguous block is roughly 40,000 sf on floors seven and eight.

Hines, like other buyers in Texas, won't discuss the hand-off price due to tax law changes and aggressive appraisal districts caught in a Catch 22 because it's a non-disclosure state. However, Oxford Commercial Inc., a member of the Cushman & Wakefield Inc. alliance, says class A office sales in the CBD have hit an average of $340 per sf, which would factor out to $140 million for the deed. Just yesterday, Thomas Properties, CalSTRS and Lehman Brothers closed on their $1.1-billion acquisition of 3.5 million sf of class A space in the CBD, including 401 Congress Ave., and the northwestern submarket.

Crescent reported a $35-million net gain in selling its 50% share. According to the REIT's SEC filings in 2006, Northwestern Life Insurance Co. held a $26-million note against the building. Records also show Crescent and the Hartford, CT-based Aetna bought the 1.54-acre asset in 1996, with the REIT paying $21.6 million to buy into the deal.

Overall says the free-and-clear sale went full circle within two months. A Holliday Fenoglio Fowler LP team in Dallas marketed the property.

Now that the deal's done, Overall says the new owner is huddling over which brokerage house gets to lease the asset. A decision will be made in the coming weeks.

The office building, positioned at the intersection of Congress Avenue and East Third Street, was designed by Hylton Dey & Associates of San Antonio and Harwood K. Smith & Partners Inc. of Dallas. The Downtown gem's skin is imported polished granite panels with glass curtain walls. The Congress Avenue entrance leads to a five-story glass atrium with dark Talvassolo polished granite. The asset includes a nine-story parking garage.

The Austin market in general coupled with the building's architectural details and location has set the stage for an indefinite hold--with no renovation needed. "Our goal is to maximize the return on the asset," Overall stresses. "We are not going to lock ourselves in to a particular hold period. We really like Austin and will look at other opportunities to invest there."

Crescent, poised to be sold to Morgan Stanley, has been in a disposition mode for the past year or two. Its Austin properties went on the block in March. Word on the street is Santa Ana, CA-based Triple Net Properties LLC has backed away from plan to buy the remaining pieces, a 433,000-sf office building at 816 Congress Ave. and the 318,000-sf Avallon office complex in the northwest submarket. Likewise, the 3.1-million-sf Dallas piece. that had been under contract to Schenectady, NY-based Trimarchi Management could be in trouble too, sources say.