Equastone Real Estate Investment Advisors has acquired and plans to reposition Centennial Towers, a 150,000 square foot office building in Austin, Texas. The firm paid an affiliate of Morgan Stanley between $13 million (€10 million) and $15 million for the property, a source familiar with the deal says.
The class B building was 77 percent occupied when the property went under contract, but a new lease and renewal since that time have edged the occupancy rate above the 80 percent mark, according to Mykel Sprinkles, investor relations manager at San Diego-based Equastone.
The firm has been on a Texas buying spree in order to achieve its goal of $150 million of acquisitions there. They expect to meet that goal soon and to close on additional properties in the near future said Sprinkles. “We should actually be there by the end of next month,” he said.
In recent months Equastone has opened a regional office in Houston and brought on Texas-based Clint Harrington as an executive vice president to oversee its activity in Houston, Dallas, Austin and San Antonio.
In May, the firm acquired a 436,190 square foot portfolio of class-B office/flex space in Austin from Morgan Stanley. Three of the four buildings had vacancy rates between 57 percent and 26 percent. The fund also acquired Atrium at Highpoint, a vacant Dallas office building that was in foreclosure, in July. Both prices were undisclosed.
Equastone has called Texas one of its favorite investment markets, citing low property prices coupled with strong job growth and falling vacancy rates.
Equastone Value Fund I closed on $53.5 million in August 2005. The fund invests in opportunistic and value-added office properties in California, Arizona, Nevada, Colorado and Texas. The firm is targeting $500 million in investments this year, after investing $200 million in underperforming assets in 2005.
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