The One American Center in Downtown Austin is now for sale
A distinctive 32-story office tower in downtown Austin is in the market.
The One American Center at 600 Congress Avenue, with its signature tiered design, was built in the early 1980s and has been a staple of the Austin skyline for nearly 40 years.
The tower went on sale early last year but was taken off the market shortly after the coronavirus pandemic broke out.
The offering of the One American Center in the heart of the central business district is a sign of the recovering Austin office market and the prospect of its future strength, several Austin office agents say.
The building is owned by the California State Teachers’ Retirement System, with Lionstone Investments of Houston as financial advisor to the pension system. The California pension system is the world’s largest educator-only pension fund, with approximately $ 308.6 billion in net worth as of June 30, according to its website.
Thomas Lawrence, a spokesman for the pension system, declined to comment on the listing: “We do not discuss specific transactions within partnerships.”
There is no fixed price for the building.
The Travis Central Appraisal District valued the One American Center, which covers approximately 504,000 square feet, at $ 285.5 million this year. However, the California pension system estimates the building’s value at $ 312.5 million.
New York-based Eastdil Secured, which is listed for the One American Center, declined to comment on the offer.
Travis Dunaway of Austin-based Endeavor Real Estate Group, which manages the building, also declined to comment.
Austin office brokers say the offering embodies investor interest in Austin, a market that continues to attract the interest of a wide variety of companies including Fortune 500 technology firms, startups, and sales, warehousing and manufacturing operations.
Connected:Indeed Tower in downtown Austin is selling for $ 580 million
One American Center tenants include Horizon Bank, the law firm Foley & Lardner LLP, WeWork, and Box Inc.
Drew Fuller, senior director in the Austin office of JLL Capital Markets, said “The amount of capital and new entrants looking for office property in Austin has grown exponentially since the beginning of the year.”
“We are currently seeing prices for several office stores exceeding pre-COVID-19 high watermarks and demand remains incredibly high,” said Fuller. “The strong investor interest in 600 convention and other active deals is a strong vote of confidence in the entire Austin office market.”
Fuller said several of the recent sales were for office buildings “which were sold empty or with little occupancy, suggesting buyers are optimistic about a full rebound in strong leasing fundamentals by year-end”.
Sam Tenenbaum, Austin director of analytics for CoStar Group, a global commercial real estate data company, said Austin’s growth is attracting national and international investors “looking to enter the Austin market.”
“Investors know that Austin has seen some of the strongest growth rates in the country. Even with the prospect of greater work flexibility, they are betting that, in the longer term, Austin’s growth will help generate oversized risk-adjusted returns, ”Tenenbaum said. “From the seller’s point of view, they are probably hoping to take advantage of this flood of capital flowing into Austin and paying substantial prices for Austin office buildings.”
Ryan Bohls, managing director of the Austin office at commercial real estate services company NAI Partners, said the property’s remarketing “signals a return to healthy conditions in the Austin office market” and “confirms the strength of Austin’s central business district. “
Tenenbaum said without knowing the building’s finances, it was difficult to say what price it could fetch. However, Tenenbaum added, “I heard that there was no real discount on the assets sold so far, however.”
In June, Kilroy Realty Corp., a publicly traded real estate investment firm based in California, bought Indeed Tower for $ 580 million. Located in downtown Austin on West Sixth Street between Colorado and Lavaca Streets, the newly completed 36-story Indeed Tower is the tallest office building in the city.
In May, Washington, DC-based Carr Properties purchased 100 Congress, a 22-story office tower on Congress Avenue and Cesar Chavez Street. The price was not disclosed.
Two years earlier, in June 2019, TIER REIT, based in Dallas, completed the sale of Third + Shoal, a 29-story office tower that was being built on the former Austin Music Hall site in downtown. The buyer was Switzerland-based Credit Suisse Asset Management, which bought the building on behalf of the global real estate fund Credit Suisse Real Estate Fund International.
On Tuesday, Tishman Speyer, one of the world’s leading real estate developers and owners, announced that it had completed its Austin entry with the purchase of the second building in the East Austin Foundry complex. The two-story office building has an area of 240,000 square meters, 96% of which is rented.
At the beginning of the year, Manhattan-based Tishman Speyer closed the Foundry I building, which opened in 2019. At that time it was announced that the second building of the foundry would be acquired after the construction work was completed.