Austin 500,000-SF portfolio trades for $76 million

AUSTIN – KBS Strategic Opportunity REIT has increased its office holdings in Austin to approximately 1.5 million sf with the acquisition of the Austin Suburban Portfolio, a group of three office properties totaling 518,000 sf.

The three properties included Park Centre, Westech 360 and Great Hills Plaza.

The REIT purchased the Class A and B assets from TPG/CalSTRS Austin LLC, a joint venture involving Thomas Properties Group Inc. and pension fund CalSTRS, for $76 million.

The largest of the assets, Park Centre, is also the newest. Consisting of three buildings, the 203,200-sf complex was developed in 2000.

Built in 1986, Westech 360 features four structures totaling 175,500 sf, while the three-story Great Hills Plaza opened its doors in 1985 with 139,300 sf.

The portfolio is presently 75 percent leased, which does not reflect the current status of the office market in Austin, where the consistently decreasing vacancy rate dropped to 15 percent at year’s end, according to a report by NAI REOC Austin.

The average remaining lease term for the tenants is approximately three years and the current weighted-average annual rental rate for the remaining lease term is $14.01 compared with the $26.53 per-sf asking rate citywide.