Spear Street Takes Austin Office Portfolio
- Aug 20, 2008
San Francisco-based Spear Street Capital has acquired an office property portfolio consisting of Riata Corporate Park and Riata Crossing in Austin. The complex includes 13 buildings totaling about 1.1 million square feet in the northwest submarket of that city, not far from the JJ Pickle Research Campus of the University of Texas at Austin, a center for electronic, aerospace, mechanical, petroleum and environmental-health engineering research. The tenant base of the Riata complex, which all together is about 98 percent occupied, likewise sports a good many tech-oriented companies, including Apple Inc., ACS–an information technology company–and Nvidia, a specialist in visual computing technologies. Other tenants include homebuilder Centex and Janus Capital Group. “We were interested in Riata because of its strong tenant base,” John Grassi, president of Speer Street Capital, told CPN. “That’s our strategy for investing in any market–look for a solid group of successful tenants.” Grassi did not disclose the transaction price. He added that the company pursued the same strategy in an earlier acquisition in Austin, Las Cimas II & III. The buildings, which total 313,000 square feet west of the city, are fully leased to Dell USA, which subleases the property to a number of other companies, including Keller Williams Realty and Texas Instruments. Besides the Austin properties, Spear Street also owns properties in California, Washington State, Illinois, Washington, D.C., and New England, forming its first investment fund in 2002 and its second in 2005. Before founding Spear Street Capital, Grassi was the chief investment officer at Shorenstein Co., buying and selling more than $3.3 billion worth of property on that company’s behalf over a 10-year period. The seller in the deal was the Blackstone Group, through its Equity Office affiliate, which it acquired last year. The Dallas office of Holliday Fenoglio Fowler L.P. represented the seller, while Spear Street Capital represented itself in the transaction.