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AUSTIN, TX-Kicking off its 360,000-sf Palisades West project, Cousins Properties Inc. in Atlanta has signed a long-term lease of 210,000 sf with Dimensional Fund Advisors in a direct deal. Construction will be launched on the class A office project during Q1 2007, with delivery scheduled for summer 2008.

The lease consideration for the deal with Santa Monica, CA-based Dimensional Fund Advisors was kept confidential, but reports put asking rates for the Southwest submarket space at $26.41 per sf. Dimensional Fund Advisors is taking the space at 6304 Bee Caves Rd. to build a stronger presence in the area.

Though Palisades West began life earlier this year as a purely spec project, “through a chain of events involving our executives and DFA’s, we decided to partner on the concept,” says a spokesman with Cousins Properties. “DFA is a 25% partner and Cousins is kicking in 50%.” Another partner, whose name was kept under wraps, is funding the additional 25%. Construction costs on similar properties range between $150 and $200 per sf, though specific financials on this project were not available.

The remaining 150,000 sf is being actively marketed to local and regional users, with the assumption it will be close to fully occupied by the time construction is completed. “The southwest Austin submarket is one of the city’s strongest and, with this commitment, we expect there to be plenty of interest in the remaining 150,000 sf,” says Tim Hendricks, senior vice president for Cousins in Austin in a prepared statement detailing the lease.

Cousins, which is handling leasing activities, is interested in a larger footprint in the market and is looking at other opportunities, though Hendricks couldn’t name specifics. “Nothing is solid right now,” he adds. “But Palisades West is an indication that we’re definitely committed to this market.”

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