Related Is Increasingly Messing With Texas
Related is growing its footprint in the Lone Star State, with a series of recent acquisitions bringing the value of its Texas holdings to $60B.
In late September, Related Cos. acquired the 6-acre 500 South Congress Ave. site just south of Lady Bird Lake for $65M, The Real Deal reports. Earlier in September, Related announced almost 600K SF worth of office projects on two sites in the neighborhood, One Lady Bird Lake and 901 South Congress Ave.
All three of Related’s sites are close to 1007 South Congress, a property appraised at $1.95M that is current home to an outpost of Equinox Fitness — a New York-based company that is partially owned by Related’s billionaire founder, Stephen Ross.
The neighborhood Related is trying to corner has become appealing for companies with wealthier employees who live south of the lake.
“You’ve got a market that really isn’t overbuilt,” Stream Realty Partners senior vice president on the agency leasing team, Travis Rogers, told TRD.
Related plans to break ground on the 490K SF One Lady Bird Lake building in 2023, hoping to deliver by 2025 a floor-to-ceiling glass-walled office tower similar to those it has built in New York City, where it developed Hudson Yards and Time Warner Center. The company also plans to complete the 107K SF 901 South Congress Ave. — which will be the first mass-timber Related property, according to Austin Towers — by 2024. Related’s plans for 500 South Congress are not yet clear.
Austin’s office buildings are the most active among the country's major markets: More than 63% of workers were back in office buildings last week, according to data from Kastle Systems. But it is not immune from the realities of the present office market: The city has a total vacancy rate of 17.9% including sublease availability, according to JLL data.
Related’s foray into the Texas office market is so new that the properties are not on its website. However, Executive Vice President Mike Iannacone — who oversaw the firm’s redevelopment of One Madison — has moved to Austin, he told the Austin Business Journal.
Related has already been an active investor in Texas multifamily. The company purchased 3,000 units spread across 21 buildings in Midland and Odessa in 2014, and purchased 520 units in Dallas’ Arium Creekside Apartments earlier this year.
CORRECTION, OCT. 18, 2 P.M. ET: A previous version of this story cited incorrect sublease data for the Austin office market reported by The Real Deal. This story has been updated.
