Fully Repositioned Corporate Campus Fetches Good Returns
Amid a continuing tight labor market, the corporate campus at 3100 Alvin Devane Blvd. recently sold after a hold period of seven years which included extensive upgrades.
AUSTIN, TX—The two-building corporate campus at 3100 Alvin Devane Blvd., formerly known as Sierra Technology Center, was originally acquired in 2012 by San Francisco-based investment firm, Drawbridge Realty, out of foreclosure in a joint venture with Austin-based HPI. Drawbridge and HPI placed a condominium map on the original single parcel and subsequently sold one building to a government-related owner/user in 2014.
Upon completion of the sale of the first building, Drawbridge purchased HPI’s remaining interest in the joint venture to solely own the property. Drawbridge then converted the remaining flex warehouse building into a creative office/R&D.
Drawbridge’s redevelopment plan included more than $3.5 million in base building capital improvements for a new lobby, common areas, roof, mechanical and HVAC systems, additional site parking to accommodate office users, and new exterior glass and skylights. An additional $4.5 million was invested into the interior for tenant finishes. LEVY Architects and Structura Inc. served as architect and general contractor for the project, respectively.
Drawbridge recently sold the asset for $18.5 million. The buyer was undisclosed.
“Drawbridge has demonstrated its broad capabilities from acquisition, financing, development, lease-up and disposition with this unique Austin site,” says Chris Elmendorf, vice president of investments at Drawbridge. “We are pleased with the final execution and investment return on this asset.”
Todd Mills, Carrie Caesar and Hunter Mills of Cushman & Wakefield represented Drawbridge on the sale. Kevin Granger and Matt Frizzell of Cushman & Wakefield represented Drawbridge on the lease up of the asset and the building is now 100% leased to three tenants: Cosential, Jones & Carter and Aggreko.
“Our investments into the property by way of a number of substantial renovations to the building proved worthwhile for our investors when it came time to sell,” Elmendorf tells GlobeSt.com.
The average asking rent in Austin office market increased 4% year-over-year and remains the highest in Texas, according to a recent report by NAI Partners. Net occupancy losses of 754,000 square feet were reported by NAI.