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Austin's Chase Tower Sells for Estimated $72M
(AUSTIN, TX) -- Although it didn't sell for a record price, the recent sale of the 35-year-old, 21-story, 390,000-square-foot Chase Tower gave Austin, TX commercial real estate market watchers new hope that the Downtown office segment may be recovering.
Spire Realty Group of Dallas, TX bought the 96-percent-leased building at 221 W. Sixth St. for an estimated $72 million -- about the same price the sellers paid for the asset in 2006. The property was listed in November 2009 for $73.7 million or about $189 per square foot.
By comparison, Equity Office Properties Trust of Chicago paid $188 million or $354 per square foot in 2006 for the 33-story, 560,674-square-foot, 515-foot-tall Frost Bank Tower, also downtown.
Thomas Properties Group Inc. bought the tower from Equity in 2007, along with nine other Austin office buildings, for a total $1.2 billion.
Spire senior vice president Jon Ruff told the Austin American-Statesman his company bought Chase Tower largely because of the stability in the Austin office market, particularly downtown.
Holliday Fenoglio Fowler's Dallas office represented the seller and also represented Spire in arranging financing.
The sellers included Austin-based Endeavor Real Estate Group and Grubb & Ellis Realty Investors LLC (formerly Triple Net Properties LLC). They paid $72 million for the building in 2006.
Holliday Fenoglio Fowler senior managing director Andrew Levy called Spire's acquisition "a significant transaction for Austin and the Southwest in general, as it evidences that both debt and equity capital is flowing once again into our markets."
Oxford Commercial partner Ford Alexander also hailed the deal as "the first significant office transaction in our market in over a year."
Ford Alexander
Alexander told the American-Statesman asking and bidding prices on office properties in Austin "have been out of equilibrium for some time, so this (deal) should portend more sales in the coming year."
Jessica Ruderman, a senior analyst at New York City-based Real Capital Analytics Inc., says the Chase Tower deal is "a great sign" of downtown Austin's recovery mode.
Spire also owns 611 E. Sixth St. in Austin, headquarters of the Texas Lottery Commission.
"We like Austin," adds Spire's Ruff. "We want to be in Austin and we plan on being there awhile."
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