Riata Corporate Park in Northwest Austin Sells $ 300 Million
As the central Texas office market continues to rebound from the impact of the coronavirus pandemic, global investment giant KKR has sold an eight-building office campus in northwest Austin that is home to a wide range of businesses.
The acquisition of Riata Corporate Park by a global institutional investor is valued at more than $ 300 million, according to KKR.
KKR paid around $ 258 million when purchasing the property in late 2019. KKR said the deal is expected to close in the coming months.
KKR declined to say who is buying the office campus, but the Bloomberg News Service reported that the buyer is a subsidiary of Starwood Capital Group, citing someone with knowledge of the matter.
Riata, which was built between 1998 and 2000, is a 688,100 square foot, 51 acre campus between US 183 and West Parmer Lane.
The campus, located at 12331 Riata Trace Parkway, sits in a fast-growing technology corridor in northwest Austin. Nearby, Apple’s billion-dollar Parmer Lane campus is expected to employ up to 5,000 people initially when completed in 2022, and up to 15,000 over time.
Riata is fully leased and tenant occupied which includes publicly traded companies as well as a mix of tech, financial services and healthcare companies. Current tenants include Accenture, Allergan, the Advisory Board Company, Sonic Healthcare and Zynga.
“Our long-term focus on high-quality properties in prime locations within attractive growing markets has led us to invest in Riata, a technology-driven office campus in one of the most desirable cities in the world. country, ”said Roger Morales, partner of KKR and head of real estate acquisitions.
KKR bought Riata from Partners Group, a global private market investment manager, and Accesso Partners, a Florida-based real estate investment manager. These two companies bought the property in 2015 for an undisclosed price.
When KKR acquired the campus in 2019 with Endeavor Real Estate Group, it announced an $ 11 million capital improvement program.
Since purchasing the property, KKR said they have improved the fitness center, cafe, landscaping, outdoor amenities and other features of the property. KKR said they also worked with Endeavor to complete deferred maintenance.
“We are proud of the property and capital improvements made under our property in what has been a very successful pre-pandemic office investment,” said Morales. “Riata, one of three 50-acre office parks in northwest Austin, is well positioned to continue to benefit from the net migration to Sunbelt cities as businesses seek to deliver great work environments. directly to their employees. “
The deal was the first investment in an Austin property by New York-based KKR, which held approximately $ 32 billion in real estate assets in the United States, Europe and Asia as of June 2021.
The sale comes as demand for office space in Austin rebounds after most businesses closed their offices amid the pandemic.
A recent report from JLL Capital Markets, the Worker Preference Barometer, found that “an increasing number of employees are experiencing burnout and (looking for) the structure, commitment and collaboration that comes from working in an office. “.
In JLL’s second-quarter office market outlook, the company said falling unemployment rates, rising consumer spending, greater mobility, and improved immunization counts are all contributing to demand. repressed from offices.
In the region’s office market as a whole, “JLL is seeing record leasing activity focused on Austin, and we remain optimistic in 2022, 2023 and beyond,” JLL’s Brent Powdrill told the Statesman earlier this month. -this.
American journalist Shonda Novak contributed to this report.