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AUSTIN, TX-Forestar Real Estate Group Inc. has become the second tenant in the 375,000-sf Palisades West office complex, which will be completed by fall. The long-term lease guarantees a 32,000-sf headquarters office for the new tenant.

Forestar Real Estate inked the deal with Cousins Properties Inc. for its project at 6304 FM 2244 Rd. Forestar now offices at 1300 S. MoPac Expressway, about four miles southeast of the new building.

An Atlanta-based Cousins Properties’ spokesman says Forestar has a partnership stake in the two-building Palisades West. “We’re putting in 50% into the project and Forestar and Dimensional Fund Advisors each have 25% in there,” he says. Locally based Dimensional Fund Advisors also is a Palisades West tenant, having signed a long-term lease for 210,000 sf in late 2006. The Forestar Real Estate lease brings the complex to 68% occupancy. Michael Brown with Cousins is leasing the complex.

The spokesman declined to discuss leasing activity for the development, but he pointed out class A office space in Austin is in high demand. Cousins Properties launched construction on Palisades West in late 2006. According to its first-quarter report, the project is costing $77.5 million or just slightly north of $200 per sf to develop. The project’s quoted rate is $30 per sf to $32 per sf.

The spokesman tells GlobeSt.com that Cousins Properties’ plan is to hold the complex once it’s completed. “We’re a REIT, and by design, we hold projects we’ve developed until such time that we feel value is maximized,” he says.

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