AUSTIN, Texas (April 23, 2024) – KBS, one of the largest owners and operators of premier commercial real estate buildings in the nation, announces the sale of SouthTech Business Center, a four-building, 260,112 square-foot Class A, light industrial property in Austin, Texas. Home to a mix of regional and national tenants, the 93% leased property, was purchased by a 1031 investor represented by MIG Real Estate.
Austin and other major markets in Texas continue to attract investors looking for high-quality commercial properties in fast-growing areas, according to Gio Cordoves, regional president, Western U.S., for KBS.
“Austin continues to be a solid market for commercial real estate investors,” says Cordoves. “Over the last 10- years SouthTech Business Center had an impressive average annual occupancy of 97%. The property presents an immediate opportunity for value-creation by leasing the last 7% of space available and elevating rents along with the rest of the market.”
According to JLL’s fourth quarter 2023 Austin industrial market report, Austin has been the second fastest-growing industrial market in the United States since 2019, having increased by 27 million s.f. or by 51.7%. Half of the total square footage that was delivered in the past five years occurred in 2023 alone due to the completion of significant projects like Tesla’s 4.5 million s.f. Gigafactory which is a short drive from SouthTech Business Center.
KBS made substantial capital investments in each of the tenant’s spaces helping increase the average tenant tenure to more than five years, according to Brett Merz, asset manager for SouthTech Business Center and senior vice president at KBS.
“SouthTech Business Center will continue to be a highly stable generator of positive cash flow from day one for the new owner, with room for rent growth,” says Merz.
SouthTech Business Center consists of four buildings totaling 260,112 square feet on approximately 20.2 acres. Each of the buildings are rear-load configured with 21′ clear heights and145′ truck courts, with significant climate-controlled warehouse space and specialized buildouts across the tenancy.
“MIG is dedicated to strategic investment in and management of sustainable residential and business communities with a focus on retaining full ownership of its real estate investment assets for value-add appreciation,” says Kevin Stiles, at MIG. “This acquisition was an opportunity to continue to grow our Austin based commercial portfolio under management with over 800,000 square feet acquired in the last year on behalf of investors in a high-demand areas.”
Trent Agnew, Charles Strauss, Lance Young and Brooke Petzold of JLL represented KBS in the sales transaction.
“KBS was one of the first major investors in Austin’s southeast submarket. The company’s stellar reputation for managing quality properties and delivering long-term value has helped to increase the visibility of Southpark and the surrounding micro-market that has become one of the preeminent locations within the entire MSA,”
says Agnew.
Attorneys Bruce Fischer, Howard Chu, and Tina Ross, and paralegal, Amanda Kennedy, of global law firm Greenberg Traurig, LLP’s Orange County and Texas offices represented KBS as legal counsel in the disposition.
According to Fischer, Greenberg Traurig’s Chair of the West Coast Real Estate Practice and Co-Managing Shareholder of the Orange County Office, who led the Greenberg Traurig team, “We were pleased to work with KBS in the sale of SouthTech Business Center. Austin continues to experience a surge of interest in the commercial industrial segment as major technology and manufacturers flock to Texas.”
For photos of SouthTech Business Center please visit here.
