EQC Sells 2 Office Assets in Austin for $65M

November 5, 2024

Investment Austin News OfficeMoreSouthwest

The duo encompasses a total of 616,000 square feet of office space.

Exterior shot of the Capitol Tower in Austin, Texas. — The Capitol Tower is LEED Silver certified. Image courtesy of CommercialEdge

Equity Commonwealth has sold two office assets totaling 616,000 square feet for $64.5 million in Austin, Texas.

The REIT disposed of Bridgepoint Square, a five-building, 440,000-square-foot campus, and the Capitol Tower, a 176,000-square-foot office property. Marbella Interests acquired Bridgepoint Square, according to Travis County public records. JLL was tapped to arrange this sale on behalf of EQC.

The company was also looking to sell 1250 H St. NW, a 196,490-square-foot office building in Washington, D.C., according to its third-quarter financial reports. Equity Commonwealth recognized a $50.2 million combined loss on asset impairment related to the office trio.

Capitol Tower came online in 1984 and EQT purchased the property for $49 million in 2012. Pomeroy Holdings sold the asset, CommercialEdge data reveals. Rising 20 stories, the building encompasses 25,805-square-foot floorplates. The tower is LEED Silver and Energy Star certified.

EQC’s financial report shows that Capital Tower was 69.4 percent leased as of Sept. 30. Tenant directory included Prosperity Bank, as well as VMware Technology and BCW, among others.

Carrying the address 206 E. 9th St., the high-rise is in Austin’s central business district, within walking distance of the Texas Capitol. Several parks, quick-service restaurants and museums are proximate to the building.

The sale of Bridgepoint Square

Exterior shot of one of the five buildings making up Bridgepoint Square, an office campus in Austin, Texas. — Bridgepoint Square’s Building 1 came online in the late 1980’s. *Image courtesy of CommercialEdge*

Bridgepoint Square’s five buildings debuted between the late 1980’s and mid-to-late 1990’s. EQC acquired the campus in 1997 for $78 million in a portfolio deal, according to CommercialEdge data. Financial Industries Corp. sold the property.

Since 2015, EQC has invested more than $13.5 million in capital improvements at the office campus. Prior to the trade, Building 5 was in a renovation process which included the lobby and common areas.

The park’s facilities rise between four and five stories with floorplates averaging from 16,000 to 22,000 square feet. Amenities comprise a cafe, a gym, a volleyball court and three parking structures. Bridgepoint Square was 52.5 percent leased as of Sept. 30, EQT’s financial report shows. The tenant roster included New York Life Insurance Co. and Burns & McDonnell, among others.

Located on 27.7 acres at 6200 and 6300 Bridge Point Parkway, the campus is about 10 miles northwest of downtown Austin. The Pennybacker Bridge, Lake Austin and Texas State Highway 360 are less than 1 mile away.

Austin’s pricy office assets

Despite an office vacancy rate of 27.8 percent in September, Greater Austin’s office assets traded on average for $379 per square foot—the highest in the country and way ahead of the national average of $171 per square foot—a recent CommercialEdge report shows.

The total office investment volume in metro Austin reached $787 million during the first 10 months of the year, according to the same source. Volume-wise, the Metroplex fared better with investors trading $1.1 billion in office assets during the same period.

Earlier this year, Endeavor Real Estate Group utilized its discretionary fund to acquire Plaza on the Lake, a 120,798-square-foot office asset in Austin. IPERS and Clarion Partners sold the property following a $5 million capital improvement plan.