JV Buys 472,383-SF Office, Industrial Mix

(To read more on the industrial market, click here.)

AUSTIN-A first-time joint venture has acquired the four-building, 472,383-sf Austin Industrial Portfolio. The predominantly bulk industrial portfolio, built between the late 1970s to the mid-1980s, has an 86% occupancy.

To fund the acquisition in the northwestern and northern submarkets, Kennedy Wilson’s Austin team tapped into a $250-million investment fund of Strategic Capital Partners in Chicago. Neither ask nor sale price is available, but comparable properties in the respective submarkets have sold for $60 per sf to $100 per sf.

According to Todd Caven, Kennedy Wilson’s managing director of acquisitions, the flex office and industrial portfolio appealed to his company because of its infill location and value-add potential. “The area is very supply-constrained,” Caven tells GlobeSt.com. “The market’s been down in Austin for years, but now it’s roaring back so it’s a great time to own assets like this.”

Caven says the lease quotes are 50 cents per sf to 80 cents per sf, triple net. He adds that ideal tenants for the flex properties are companies wanting lower rents than the going rate for office space.

One building is located in the northern submarket–the 124,200-sf McKalla 2 at 2500 McHale Ct. The rest of the portfolio, situated in the northwestern sector, is the 245,608-sf McNeil 1 at 12317 Technology Blvd. and 102,575-sf McNeil 8 and 9, which are at 12301-12303 Technology Blvd.

The Dallas office of Holliday Fenoglio Fowler LP and HPI Real Estate Services & Investments Inc. of Austin represented the Boston-based seller, TA Associates Realty. Kennedy Wilson, using an in-house team to negotiate the purchase, has put Tom Pardee and Lennard Coplin in charge of leasing and management.