AUSTIN—Although once overlooked by investors, Austin has begun to attract more attention from investors and office transactions are on the rise.

Austin-based Cielo Property Group purchased 823 Congress Avenue, a 181,000-square-foot office building in downtown Austin, just two blocks from the Texas Capitol. The 15-story building was purchased from Amstar/Stacy 823 LP, a partnership between Denver-based Amstar and CapRidge Partners.

“The Texas market in general has seen a steady rise in rental rates, and we like the underlying fundamentals for the Austin office market on a long-term basis. We believe assets like 823 Congress will perform well in the coming years,” said Rob Gandy, co-founder and managing partner of Cielo.

Occupancy in downtown Austin is on the rise. According to Jones Lang La Salle, occupancy has increased by seven percentage points, closing 2013 year at 90.4%.  With demand increasing in the CBD submarket and an overall lack of availability, downtown asking rates increased by 11.7% last year, currently averaging $40.47 per square foot, said JLL.

The property, 94% occupied at the time of purchase, was sold for an undisclosed price.

Cielo acquired three historic office and retail buildings in the 300 block of Congress Avenue in downtown Austin last year. Additionally, six months ago the group bought Neuhaus Tower, the 17-story, 240,000-square-foot Chase Bank building in McAllen Texas which is the tallest building in the Rio Grande Valley. Cielo currently owns 15 assets including retail, office and multifamily properties across Texas.