Austin Office Investment Lacks Momentum
In the first quarter of 2022, the Texas capital registered one of the lowest office investment across the Sun Belt region.
While construction activity is still booming in the Texas capital, deals have slowed down in the first quarter of 2022. Among similar Sun Belt cities, Charlotte’s office transaction volume was also low in this period, with $99 million transacted in the first quarter.
At the other end of the spectrum, Dallas registered the second highest office investment volume in the country year-to-date through March, with a total of $1.14 billion recorded. Deals in Houston also exceed the $1 billion mark. Other high-performing Sun Belt cities included Phoenix ($875 million) and Atlanta ($844 million).
Austin’s average sales price for office product in the first quarter of 2022 clocked in at an estimated $316 per square foot, lower than the 2021 average, which reached $441 at the end of December.
The biggest deal of the quarter was the $134 million sale of the Alpha Building in the master-planned community of Mueller Austin, Texas. Shorenstein Properties sold the newly constructed, roughly 210,000-square-foot building to the Teacher Retirement System of Texas. The tower represents the first piece of the four-building ensemble slated to comprise a total 800,000 square feet.
Another notable transaction that also closed in January was Walton Street Capital and Cypress Real Estate Advisors’ acquisition of Eastlake at Tillery, a two-building, Class A office complex. The LEED-certified property came online in 2021 and comprises nearly 177,000 square feet.