Hines Acquires Austin Office Tower Valued at $95 Million

June 07, 2007 By Tonie Auer, Southwest Correspondent


In a recovering Austin office market, Houston-based Hines acquired 301 Congress Avenue from Fort Worth-based Crescent Real Estate Equities Company for an undisclosed amount. The property is valued at $95 million by the Travis Central Appraisal District.

A Hines spokesman said the strengthening of the Austin market and the location of 301 Congress Avenue made the property an attractive re-entry to the market for the company. Hines originally entered Austin in 1975 with the downtown development of the Austin National Bank building, which is now the Bank of America Tower. Hines sold the building in 2004.

The 418,000-square-foot, 22-story Class A tower at 301 Congress Avenue (pictured) is located in downtown Austin with views of both the Capitol and Town Lake. The office building is currently 85 percent leased to tenants including AIM Management, A.G. Edward & Sons Inc., BearingPoint Inc., Citigroup, Guaranty Bank and RBC Dain Rauscher.

The property was owned in a 50/50 joint venture by Crescent with Aetna Life Insurance Co. Crescent's share of the net gain is approximately $35 million, according to company information. The Austin office of Hines acquired the property on behalf of National Office Partners Limited Partnership, its investment partnership with the California Public Employees' Retirement System (CalPERS).

Holliday Fenoglio Fowler represented the seller, and Hines represented NOP in the transaction. Hines will assume property management and leasing responsibilities.In 2006, 17 office buildings larger than 50,000 square feet traded hands in the Austin area, with the Frost Bank Tower setting a record sales price in Texas at approximately $355 per square foot.

Two new office buildings opened their doors in the fourth quarter totaling 167,500 square feet and several more are scheduled to follow this year. There is approximately 1.1 million square feet of office construction underway that will provide some options in the southwest and far northwest submarkets, according to the Oxford Commercial Market Report’s 4th Quarter 2006 Office Survey for Austin.In late December, Denver-based Amstar Group purchased 823 Congress, a Class B 180,000-square-foot office building on the same street as the Hines building, for an undisclosed amount.

Crescent Real Estate Equities Co. is a real estate investment trust headquartered in Fort Worth, Texas. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 68 office buildings totaling 27 million square feet located in select markets across the United States with major concentrations in Dallas, Houston, Denver, Miami and Las Vegas. Crescent also holds investments in several resort residential developments.

Hines is a privately owned real estate firm involved in real estate investment, development and property management worldwide. The Hines portfolio of projects underway, completed, acquired and managed for third parties includes more than 950 properties representing approximately 380 million square feet of office, residential, mixed-use, industrial, hotel, medical, retail and sports facilities, as well as large, master-planned communities and land developments.

National Office Partners was formed in 1998 and holds assets located in Chicago, Emeryville, Calif.; Houston, Palo Alto, Calif; Salt Lake City, San Francisco, Silver Spring, Md; Wellesley, Mass.; and Seattle. CalPERS is the nation’s largest public pension fund with assets totaling $249 billion, of which $19 billion is invested in real estate. The system provides retirement and health benefits to more than one million state and public employees and their families.

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