HPI Real Estate Services & Investments provided a glimmer of light to Austin’s ailing office market.
The local firm purchased two office buildings, Barton Oaks Plaza II and III, in Southwest Austin, the Austin Business Journal reported. The buildings have a combined 237,400 square feet.
This isn’t the first time HPI has owned the buildings.
A joint venture between HPI and Dallas-based Sarofim Realty Advisors sold the buildings to Atlanta-based Invesco Real Estate in 2014, the outlet previously reported.
After managing and leasing the property for the past 28 years, HPI aims to maintain its relatively strong occupancy rate, which sits at 85 percent.
The acquisition propels HPI to the sixth-largest commercial property owner in the Austin metro, expanding its portfolio to approximately 3.9 million square feet across 53 buildings, the outlet said.
While the sale price remains undisclosed, the properties were recently appraised at a combined $83 million for tax purposes, although market value often exceeds appraisal value.
HPI represented itself in the deal, while JLL’s Andrew Levy and Kesley Shebay represented Invesco. Barton Oaks Plaza II and III have had an average occupancy rate of 94 percent since 2014, attributed to a strategic leasing approach offering smaller blocks of space.
While Austin’s office vacancy rose to 21.8 percent in the fourth quarter, new leases totaled 1.3 million square feet, the highest level since the second quarter of 2022, the outlet said. However, the market could face further challenges in 2024 as new office developments open, inflating vacancy.
Earlier this week, HPI refinanced the 1.1 million-square-foot Ross Tower in downtown Dallas with a $155 million loan extension. The firm is also at the helm of a large multifamily project in North Fort Worth.