Endeavor Snaps Up 120 KSF Austin Office Building
An entity affiliated with Endeavor Real Estate Group has purchased Plaza on the Lake—a 120,798-square-foot office building in Austin, Texas—from a joint venture between IPERS and Clarion Partners, CommercialEdge data shows. The asset previously traded in 2014 for $36.9 million, the same source reveals. Newmark brokered the transaction on behalf of the seller.
Rising to three stories on a 4.5-acre site, the 1985-built office building went through a $5 million capital improvement plan in 2021. The property features an outdoor amenity space, gym, as well as paddle board and kayak storage.
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Located at 5000 Plaza on the Lake in Southwest Austin, the property is roughly 7 miles southwest of U.S. Route 183 and some 13 miles northwest of downtown Austin. Pennybacker Bridge and Lake Austin are within a five-minute walk of the office building, while Davenport Village—a 129,000-square-foot retail center—is 1 mile away.
Newmark Vice Chairmen Chris Murphy, Robert Hill and Gary Carr represented the seller.
Austin’s office fundamentals
At the time of the deal, Plaza at West Lake was 68 percent leased, with 89 percent of the tenant roster secured during the last three years. According to a Newmark report, leasing activity totaled 4.1 million square feet in Austin last year, landing below the 16-year annual average of 7.4 million square feet. Unsurprisingly, the occupancy rate took a dip during 2023, with vacancy increasing by 420 basis points to 22.2 percent.
Despite the increasing vacancy rate, Austin’s office-using job market recorded 424,510 employees in November—a 33.2 percent jump since 2019, the Newmark report also reveals. However, the market’s overall unemployment rate at the end of 2023 rose by 62 basis points on a year-over-year basis, climbing to 3.4 percent, but still below the five-year average of 3.9 percent.
As reported in a recent market update, Austin witnessed 2.9 million square feet of office space changing ownership year-to-date through November 2023, totaling $496 million. The average price per square foot reached $316.4, surpassing the national average of $192.8 per square foot. Last August, CIM Group sold Fifth + Tillery, a 182,700 square feet office building, to Capital Metro for $87 million, according to Austin American-Statesman.
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