Dennis DuBois, Prentiss' managing director for the Southwest region, tels GlobeSt.com the feat has been accomplished in a brief three months. "In the Southwest portion of the city, there is such a lack of supply that if people want to be there, they have to stand up and commit," he says.
And, commit they did. Vignette Corp. has signed a 10-year lease for 110,000 sf in Prentiss' fifth building, which broke ground yesterday. DuBois isn't identifying the other tenants until pacts are signed. One deal is expected to be finalized within two weeks and the other to follow shortly thereafter, says DuBois.
The class-A structure is expected to cost $38.1 million, with the shell being ready for finish-out in November 2001. Prentiss says it expects a weighted average cash yield of 12.7% for Barton Skyway IV, which will take the MoPac Expressway-Barton Skyway development to full build-out with 850,000 sf.
The project is being funded from asset sales in an ongoing recycling strategy. In concert with Barton Skyway IV's start, Prentiss announced the sale of the last of its holdings in Tucson--the seven-story, 138,590-sf Eastside Newport Center. Prentiss had bought the 13-year-old flex complex, which is 97% leased, in February 1998 as part of its acquisition of Newport National. Prentiss has received about $5.7 million in gross proceeds from the sale.
"Barton Skyway IV represents the culmination of a great success story for Prentiss Properties at this specific location in Southwest Austin," says DuBois. In-place entitlements have enabled the project to start without waiting a standard 12 to 18 months as required by Austin's permitting process.
Prentiss' Barton Skyway holdings include Spyglass Point, 60,000 sf; Barton Skyway I, 196,000 sf; Barton Skyway II, 196,000 sf; and Barton Skyway III, 173,000 sf that are under construction. It is 67% leased and 98% committed, with an expected weighted average cash yield of 12%. The first three buildings, all fully leased, had been completed between summer 1999 and fall 2000 and carry a weighted average cash yield of 11.8%. The submarket has a vacancy ratio of 0.4%, according to Colliers Oxford's midyear report.
Dallas-based Prentiss Properties will control 1.1 million sf in southwest Austin with the five Barton Skyway buildings and the 271,000-sf Cielo Center, which it had acquired from Mack-Cali in a failed merger in September. Prentiss' Austin properties also include a joint venture with IBM, the sole tenant in a 1.1 million sf, seven-story class-A office complex in Northwest Austin.
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