Block 21 The venue has a251-room W Austin Hotel and is home to Austin City Limits Live(credit: Michael Barera).

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AUSTIN, TX—In a transaction that is expected to close in thefirst quarter, Block 21 is expected to sell for $275 million. Block21 is Stratus Properties' wholly owned mixed-use real estatedevelopment and entertainment business located in downtown.

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In Block 21, Stratus created one of the most unique venues inthe country by bringing together music, hospitality and business inone location. The venue has a 251-room W Austin Hotel and is hometo Austin City Limits Live at the Moody Theater, a 2,750-seatentertainment venue that serves as the location for the filming ofAustin City Limits, the longest-running music series in Americantelevision history. Block 21 also includes class-A office space,retail space, and the 3TEN ACL Live entertainment venue andbusiness.

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Savills is representing Stratus in the sale of Block 21. Theteam is led by capital markets in New York and supported by localbrokers in the Austin office and Savills Global Hospitalityadvisors.

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"Block 21 is the premier asset in the heart of Austin's 2ndStreet District," said Savills vice chairman Mike Rotchford. "It isthe best asset in the most exciting growth location in America.It's not often that sites like this are marketed, so we're pleasedto represent Stratus in this deal."

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Ryman Hospitality Properties Inc., a real estate investmenttrust, has agreed to purchase the property by assumingapproximately $142 million in existing mortgage debt and paying theremainder of the purchase price in cash.

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"Savills helped us obtain over 100 confidentiality agreementsfrom domestic and foreign investors, arrange more than 20 in-depthproperty tours, and receive multiple bids from several high-profilesuitors," said William H. Armstrong III, chairman of the board,president and CEO of Stratus. "Ultimately, based upon Savills'advice, we decided Ryman was just the best fit. Their expertise inhospitality and live entertainment make them the ideal company tousher Block 21 and ACL Live into the next decade."

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Rotchford explains the appeal of Austin as compared to New Yorkand San Francisco.

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"The investment sales market in Austin is strong. Austin hasgone from being the best secondary city to ranking among the toptier, measured against cities like New York and San Francisco.International and domestic demand for Block 21 was tremendous fromtraditional core buyers, hotel investors, family offices andstrategic buyers," Rotchford tells GlobeSt.com. "This dealhighlighted the attractiveness of Austin and will likely lead tocontinued robust volume in the local investment sales market."

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Available class-A space in Austin's most desired submarkets hasbeen rapidly decreasing, evidenced by an all-time-low class-Aavailability rate of 8% in the CBD as of third quarter, accordingto a Savills office report. This lack of availability in primelocations has forced sizeable occupiers to look elsewhere to findlarge blocks of contiguous space. In fact, there are only twocontiguous existing options in the core greater than 50,000 squarefeet.

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.