REAL ESTATE - DivcoWest has closed on the purchase of an office building in Austin, Texas.
The real estate fund manager paid $49m (€37.3m) for the Parmer Business Park in Austin. The property was acquired from pension fund manager RREEF.
The property covers 28 acres of land. There are a total of six one-story office buildings at the facility totaling 256,737 s.f. The entire space in the project is leased to Sun Microsystems to the end of 2010. There have been several companies that have subleased space from the main tenant. These have included Abbott Spine and GTECH.
DivcoWest sees that the project is centrally located. It’s situated on mile from Austin’s key Mopac expressway. The site is nearby to the northeast Austin submarket, which offers a large housing base for many employees.
Sam Hamilton is an investment officer for DivcoWest. He said, "Austin is a good example of the kind of market that we are trying to buy assets, given its base of technology oriented companies."
The asset will be of just a few properties that are included in DivcoWest’s newest commingled fund, Market Street Capital Partners. The commingled fund manager raised $650m of equity for the fund. A final closing occurred last year. One of the investors in the fund with a $100m commitment was the California Public Employees Retirement System. There a now a total of four deals that have been completed for the fund.
DivoWest is looking at investing in a variety of technology oriented markets across the country. This would include places like Austin, Boston, Washington, D.C., Northern and Southern California and the Pacific Northwest.
Many of its deals will include office and industrial buildings. The transactions are mostly buying existing technology related properties that can be improved through re-leasing, re-tenanting or redevelopment.