Chase Tower is a 21-story 390,000-square-foot class-A office tower with ground-floor retail (credit: Thomas McConnell).
AUSTIN, TX—Tenant demand continues to characterize the Austin market, and investors have followed. One recent example is CIM Group's acquisition of Chase Tower, a 21-story approximately 390,000-square-foot class-A office building with ground-floor retail in downtown. The price was undisclosed.
Built in 1974, the tower and adjacent parking structure span a full city block at 221 W. Sixth St. located in the central business district. It is surrounded by restaurant, retail, entertainment and hotel options, and is a short walk to the hike and bike trail fronting Lady Bird Lake. Chase Tower also is easily accessible from Interstate 35 and in walking distance to one of the city's Capital Metro transportation stations.
The building is occupied by tenants representing a diverse set of industries including financial services, technology, law and professional services.
The acquisition of Chase Tower adds to CIM's growing office portfolio in Austin, which includes East Side Village, Hartland Plaza and Penn Field on South Congress, where CIM is constructing a 44,000-square-foot building, the first new building and the 11th on the campus. CIM's Austin portfolio also includes The Independent, a recently completed 58-story 363-unit condominium tower and the tallest building in Austin.
Adjacent to The Independent, CIM developed the Seaholm project, a redevelopment of the 126,000-square-foot 1950s-era decommissioned historic art deco Seaholm Power Plant, into office and restaurant uses. Additional development includes a two-story 68,000-square-foot low-rise contemporary glass and steel building anchored by a Trader Joe's grocery store and the 30-story 280-unit Seaholm Residences condominium tower.
CIM also owns and operates the District at SoCo apartment building.
"CIM Group is an active owner and operator in Austin, and continues to seek new opportunities in the community. Chase Tower is an established, desirable property in a central downtown location, and is a solid addition to our diverse Austin portfolio," Avi Shemesh, co-founder and principal, CIM Group, tells GlobeSt.com.
CIM applies its community-focused approach to real estate to enhance neighborhoods. The firm has been active in Austin since 2007 with office, residential, retail and mixed-use properties.
The Austin office market tightened even further, with vacancy decreasing slightly to 8.6% compared with this time last year at 9%, according to a report by NAI Partners. Gross average asking rental rates keep climbing at $35.85 per square foot, up $1.69 or 4.9% from May 2018. Tenant demand is driving the record-breaking 7 million square feet under construction with more than 60% of that space already leased. In addition, there has been 4.2 million square feet of leasing activity year-to-date, up more than 80% from this time in 2018, says NAI Partners.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
