X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

AUSTIN-Despite the weak Austin office market, it’s full steam ahead on a northwest Austin office building.

“Piers have been poured, the lower retention pond has been concreted in and they should be pouring the bottom parking lot slab this weekend,” says Al Lehtonen Jr., a College Station lawyer, who’s developing the project with his father. “That’s the general progression and it should be completed sometime by March 1, 2003.”

Lehtonen tells GlobeSt.com that no leases have been signed for the 45,000-sf building on Shepherd Mountain. “We haven’t tried,” he says. “We’re going to start that in the next few weeks, going out and actively searching for tenants.”

He plans to pitch the building to professional firms seeking 2,500 sf to 5,000 sf. “Multiple tenants diversify your portfolio up there,” Lehtonen says, adding that he doesn’t plan to hire a broker to market the space.

Lease rates for the building could be around $25 per sf to $27 per sf, he says. That will include utilities, taxes, insurance, some janitorial and upkeep for the grounds.

Lehtonen says he and his father have a lot of equity in the project “so that’s going to help us in our overall expense, especially interest costs.” As a result, they can sport a better cost structure than another building with 85% of the building cost provided by a lender.

The northwest submarket has about 664,830 sf of vacant space, according to Colliers International’s second quarter report. That’s a 17.5% vacancy rate for all classes of space in the submarket. Class A space is standing 29.7% vacant, with rents ranging from $14 per sf to $29 per sf and the average at $23.08 per sf.

L.M. Holder III of Austin is the building’s architect. Dallas-based Constructors is the project’s general contractor.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.