Home of Austin City Limits Live Expects to Sell for $275M

AUSTIN, TX—In a transaction that is expected to close in the first quarter, Block 21 is expected to sell for $275 million. Block 21 is Stratus Properties’ wholly owned mixed-use real estate development and entertainment business located in downtown.

In Block 21, Stratus created one of the most unique venues in the country by bringing together music, hospitality and business in one location. The venue has a 251-room W Austin Hotel and is home to Austin City Limits Live at the Moody Theater, a 2,750-seat entertainment venue that serves as the location for the filming of Austin City Limits, the longest-running music series in American television history. Block 21 also includes class-A office space, retail space, and the 3TEN ACL Live entertainment venue and business.

Savills is representing Stratus in the sale of Block 21. The team is led by capital markets in New York and supported by local brokers in the Austin office and Savills Global Hospitality advisors.

“Block 21 is the premier asset in the heart of Austin’s 2nd Street District,” said Savills vice chairman Mike Rotchford. “It is the best asset in the most exciting growth location in America. It’s not often that sites like this are marketed, so we’re pleased to represent Stratus in this deal.”

Ryman Hospitality Properties Inc., a real estate investment trust, has agreed to purchase the property by assuming approximately $142 million in existing mortgage debt and paying the remainder of the purchase price in cash.

“Savills helped us obtain over 100 confidentiality agreements from domestic and foreign investors, arrange more than 20 in-depth property tours, and receive multiple bids from several high-profile suitors,” said William H. Armstrong III, chairman of the board, president and CEO of Stratus. “Ultimately, based upon Savills’ advice, we decided Ryman was just the best fit. Their expertise in hospitality and live entertainment make them the ideal company to usher Block 21 and ACL Live into the next decade.”

Rotchford explains the appeal of Austin as compared to New York and San Francisco.

“The investment sales market in Austin is strong. Austin has gone from being the best secondary city to ranking among the top tier, measured against cities like New York and San Francisco. International and domestic demand for Block 21 was tremendous from traditional core buyers, hotel investors, family offices and strategic buyers,” Rotchford tells GlobeSt.com. “This deal highlighted the attractiveness of Austin and will likely lead to continued robust volume in the local investment sales market.”

Available class-A space in Austin’s most desired submarkets has been rapidly decreasing, evidenced by an all-time-low class-A availability rate of 8% in the CBD as of third quarter, according to a Savills office report. This lack of availability in prime locations has forced sizeable occupiers to look elsewhere to find large blocks of contiguous space. In fact, there are only two contiguous existing options in the core greater than 50,000 square feet.