AUSTIN-Grubb & Ellis Co. is turning on lights this morning in its first office in the capital city since 1996. The corporate plan is to assemble a full-service transactions team with 10 professionals in the first year.

Ernest Brown, executive vice president and managing director for San Antonio, is overseeing the Austin initiative. He says the company has leased 3,500 sf at 8303 N. Mopac Expressway for the launch pad, shifting the steadily growing team from an executive suite into a full-size office.

The expansion decision was mortared in the traction that the Grubb & Ellis advance team has gained in recent months. Though there’s still work to do, the leasing portfolio is up to 350,000 sf, mostly retail space, and another 200,000-sf assignment is awaiting a final signature, Brown tells GlobeSt.com.

Brown has hired one of Austin’s senior brokers in the office and industrial markets, but is keeping his name under wraps for just a bit longer. The immediate need, he says, is to add muscle for office and industrial brokerage. “We’ve built a very good, experienced retail team and we have a good multi-housing team,” he says about the ground-level push to become a dominant player once again in the city. For the past decade, Grubb & Ellis brokers have commuted 80 miles from San Antonio to service their Austin clients.

Besides Brown, the Austin office’s executive team includes Larry Eisenberg, senior vice president of retail; Scott Rosales, vice president of multi-housing investment; Richard Sheppler, vice president of retail; Glenda Raper, vice president and senior business operations manager; and Cherry Smith, senior property manager. The associates’ roster is led by 12-year professional Jason Mittman along with Charlie Aycock and Jake McAlister, all on the retail team, and multi-housing specialist Travis Watkins.

Robert Kramp, vice president and director of national research and client services, says his team’s collected four years of market data to back up Grubb & Ellis’ local research. He says the card that will be played is to provide a boutique shop with a full-service platform supported by the resources of an international company. “Having that additional location is a tremendous benefit for us,” he says.

The Austin market took a hard hit during the tech wreck, but started to come back strong about 18 months ago. “We have clients all across the country needing our services in Austin,” Brown says. “The market’s turned very quickly. Rental rates are going up. In some places, rates are going up every month.”

Kramp says Austin is the third largest office market in the state, but it holds bragging rights to the highest average rent–$20.33 per sf, full service. Occupancy is 16.9%, the second lowest of Texas’ Big Four. Adding to its sweet spot is an inventory of just 41 million sf and recognized barriers to entry for new space. “That’s positive from an investment standpoint,” Brown points out.

Austin has the state’s third largest industrial market with 64 million sf. Vacancy is 8.2%; rents, on average, go from $6.20 per sf to $6.70 per sf, according to Kramp.

From a retail perspective, the city’s long been proclaimed to be under-served, but even that has changed. While the commercial sector waited for strong rebounds in office and industrial space, retail developers pushed out seven million sf in the past two years, according to the Grubb & Ellis team.

The city’s dynamics have created “an almost perfect situation,” Kramp says. “Rising employment, strong population grow, low inflation and a low cost to do business are all driving the market.”

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