CIM Group Boosts Austin Portfolio With Major Office Buy
- Aug 22, 2019
CIM Group has acquired Chase Tower, a 390,000-square-foot Class A office tower in downtown Austin. The sellers were Goldman Sachs Asset Management and Lincoln Property Co., Yardi Matrix information shows. According to the Austin-American Statesman, Cushman & Wakefield Capital Markets represented the partnership in the sale.
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Further, it was reported that the tower is valued at $213.3 million, according to the local appraisal district. The sellers paid $143.6 million for the asset in February 2017, per Yardi Matrix.
The 21-story building, which includes ground-floor retail and an adjacent 775-space parking structure, spans a full city block at 221 W. Sixth St. In addition to the anchor tenant, WeWork occupies 65,000 square feet, also per Yardi Matrix data. The building includes tenants in financial services, technology, law and professional services, and is home to the office of U.S. Senator John Cornyn. The top floor is the site of The Headliners Club restaurant.
An active, tight market
The acquisition adds to CIM’s substantial presence in Austin. At the high end of the spectrum, the company co-owns The Independent, a recently completed 58-story, 363-unit condominium tower and the tallest building in Austin. At Penn Field on South Congress, CIM is underway on a 44,000-square-foot project, the first new building and the 11th on the campus.
The vintage side is represented next door to The Independent, where CIM redeveloped a decommissioned 126,000-square-foot, 1950s Art Deco power plant into office and restaurant space, accompanied by new development including a two-story, 68,000-square-foot building anchored by a Trader Joe’s grocery store and the 30-story, 280-unit Seaholm Residences condominium tower.
The Austin office market has enjoyed an average vacancy under 10 percent for 20 consecutive quarters, as absorption has largely kept pace with unprecedented amounts of new construction, according to a July report from NAI Partners. Class A space in the CBD has an average vacancy of just 6.2 percent as of the second quarter, on an inventory of 9.9 million square feet. The overall gross average asking rent is $52.12 per square foot, also per NAI Partners.