Construction starts on $47 million office
park
Two other projects rising in hot Northwest Austin
market.
AMERICAN-STATESMAN STAFF
Thursday, February 14, 2008
Trammell Crow Co. has started construction on Pecan Park, a $47 million office project in hot Northwest Austin, joining two others rising at a key intersection.
Pecan Park, at the southwest corner of U.S. 183 and RM 620, will have two buildings totaling 272,000 square feet, said Lance Sallis, a principal with Trammell Crow. It is expected to open in December, with space leasing for $28 a square foot. Although no leases have been signed, several prospective tenants have expressed interest, Sallis said.
Part of the land on the 26-acre Pecan Park site is under contract to an undisclosed hotel developer, and that sale is scheduled to close in early March, Sallis said.
The other projects in the area are Aspen Properties' Aspen Lake, an office building with 210,720 square feet that will open in May at the southeast corner of U.S. 183 and RM 620, and Simmons Vedder Partners' Crossings at Lakeline, which will add 235,000 square feet of space when it opens in June near 183 and 620.
Northwest Austin is going through a period of residential and retail development, with more to come because of new toll roads and a commuter rail stop.
The three projects under construction "are establishing the intersection as an important office center," said Jeff Pace, vice president of office development for Simmons Vedder.
The Crossings at Lakeline, adjacent to the commuter rail stop, will be a transit-oriented, mixed-use development built in three phases. The current site plan calls for 1.5 million square feet of office, 1,469 multifamily units and 29,000 square feet of retail.
Pace said the first 340 apartment units are in the design phase, and Simmons Vedder expects to start on those in the fall. Other mixed-use projects include Pacific Summit Partners' Lakeline Station, which is scheduled to break ground late this year or early 2009 and will have 2,7000 homes and 150,000 square feet of retail. Also, the adjacent Northwoods at Lakeline is expected to break ground this year and will have 1,000 housing units and five acres of retail.
"The Northwest market out 183 for a long time has been Austin's largest growth corridor, but never a serious office submarket," Pace said. "But the roadway improvements have created a whole new vitality and convenience for people to get around."Kevin Granger, senior vice president with Aspen Properties, said employers increasingly are choosing a suburban address to avoid rush-hour commutes for their workers.
"That's a great market to be in now, with the toll roads," Granger said. "With traffic getting worse and continuing to get worse in Austin, it just fuels companies' decisions to not go to interior Austin, but to the periphery."
In addition, the 183-620 area is accessible to both work force and executive housing, with nearby moderately priced subdivisions in Cedar Park, Leader and Liberty Hill and higher-end housing in Steiner Ranch and Lakeway.
"Everything's growing that direction," Granger said of the area. "And we don't see that changing. That's where the majority of Austin's growth is heading."
The only thing missing from that intersection is first-class office space, he said, but that won't be the case for much longer.
Space at Aspen Lake will rent for $34 a square foot.
Subsequent phases of Aspen Lake will bring an additional 1.3 million square feet of mixed-use space.
Trammell Crow broke ground on Pecan Park last month.
"In the last two years, we were pretty slow in terms of prospect activity, but it seems after the first of the year, activity turned back on," Sallis said. Pace, however, said that though there has been "some new leasing interest since the beginning of the year, overall demand for office space has been cool in the last several months." But, he added: "We anticipate that demand will pick up in the second half of this year and continue into 2009, as several economists have forecasted."