Austin is the kind of market Intercontinental likes, John Matteson, director of acquisitions, tells GlobeSt.com, and it expects to hold to the properties for awhile. No one's talking terms but, he says, "We're eight-10-12 year holders of properties, so we're in for the long term. We're focused more on location and quality of assets than trying to flip these properties in two years."
Stone Creek Plaza I, a 75,000-sf building at 11902 Burnet Rd., is 100% leased by its sole tenant, First American Flood Data Services. The 165,000-sf Stone Creek II, 11921 N. MoPac Expressway, is 88% leased. Siemens is the anchor tenant. "We bought these (buildings) at good cap rates going in and we see some upside with the vacant space in Stone Creek II to build a turnaround and get that space leased up," Matteson says.
Miller Global, based in Denver, and Houston-based Yancey Hausman co-developed the buildings. Those companies also developed the Canyon at Wild Basin, which Intercontinental bought in June. Yancey-Hausman will continue to manage and lease the three buildings. Andy Levy and Jeff Stone of Eastdil Realty's Dallas office represented the owners and Matteson acted for Intercontinental.
Matteson says Intercontinental looks for markets that are similar to Boston. Austin, he says, has a diverse economy with state government, the University of Texas, technology and manufacturing as components. It also has high barriers to entry that could slow down new competitors.
The barriers include the geography with the hills and canyons and the local government. "They scrutinize new developments a lot more than most markets," Matteson says. "It's very similar to what we deal with here in Boston and Cambridge where there's a two-year lead time before you can build a project. So it just makes it a little more difficult to get deals completed.
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