Ascentris Acquires Paloma Ridge, 70% Leased Class A Office Property Located in Austin, TX
Denver, CO (December 13, 2017) – Ascentris, a Denver-based real estate private equity firm, on behalf of one of its public retirement system clients, announced today the purchase of Paloma Ridge, a 210,000 square-foot, Class A multi-tenant office property in Austin, TX. The property, located at 13620 Ranch Road 620 North, is comprised of two buildings on 23 acres, as well as 13 acres of developable land that can accommodate an additional 170K square-foot office building. The purchase price was not disclosed.
Paloma Ridge is strategically located in Northwest Austin on TX-45 between Parmer Lane and US-183, and is less than one mile from the Capital MetroRail Lakeline Station with direct access to The Domain and Downtown. The Northwest submarket is the beneficiary of increasing rents with cyclically-low vacancy and a limited development pipeline. Further, Austin’s current population growth is concentrated in the northern suburbs; Williamson County’s population grew by more than 25% residents from 2010 – 2016, which compares to 19.8% for the Austin MSA.
Ascentris’ business plan calls for stabilizing the 70% leased property while capitalizing on increased tenant demand. Paloma Ridge is the only first-generation space in its competitive set, and has been successful attracting tenants seeking high-quality space at a material discount to the Domain. Ascentris will pursue Energy Star Certification for both buildings, will explore capital improvement projects that support energy efficiency to reduce operating expenses and will seek to develop the third building when the market demands.
“Ascentris is currently targeting high-quality, differentiated, suburban office properties in historically-resilient markets where there is a significant rent and valuation discount from their CBD counterparts. Paloma Ridge is a great example of what Ascentris finds attractive currently when investing in the US office property sector,” said Ascentris Vice President Jake Rome.
Developed in 2016 by Alliance Bernstein and Stream Realty Partners, the property appeals to the submarket’s prevalent high-density office tenants by offering large flexile floorplates and abundant parking. The 15’ slab-to-slab ceilings and polished concrete floors enable the creation of creative office spaces which are desired by many technology companies and their employees. Common amenities include showers and lockers in each building, outdoor gathering areas and a routine food truck service. The best-in-class property is a candidate for the City of Austin’s Green Energy Certification and has attracted national-credit tenants diversified across many industries including Mercury Insurance, Informatica, CalAtlantic Homes, American Advisors Group and Charter Communications (formerly Time Warner Cable).
Ascentris retained Stream for property management and leasing. The sale was brokered by Evan August and Mike McDonald of Eastdil Secured.