Tishman Speyer is making a push into Austin, purchasing two office buildings in one of the Texas city’s rapidly developing neighborhoods.
The New York City–based firm paid between $145 million and $150 million for the Foundry I and Foundry II buildings, according to Bloomberg News. The properties are located in east Austin, where around 1.1 million square feet of office space is under construction.
Cielo Property Group developed the Foundry buildings. Together they have 240,000 square feet of office space and 17 residential units. One opened in 2019 and the other is expected to open later this year.
Vacancy increased and asking rents fell last year because of the coronavirus pandemic, but Austin could be one of the strongest markets in the country going forward.
That’s thanks in large part to an influx of tech companies that was already underway before the pandemic. High-tech industries have grown by 25 percent over the last five years in the city.
“Tishman Speyer is focusing on markets where the best tech entrepreneurs are collaborating with leading academic institutions,” Chief Executive Rob Speyer said in an email. “Going forward, Austin will be in our portfolio alongside Boston, San Diego, the Bay Area and more.”
Economic growth in Austin has made the city’s housing market competitive. A recent Zillow survey found that 84 percent of participating industry experts, economists, and investors expected that Austin home prices will grow faster than the national average, the strongest consensus about any trend in any U.S. market.
[Bloomberg News] — Dennis Lynch
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