Aspen continues NW Austin push

By A.J. Mistretta
Austin Business Journal


Aspen Properties Inc. has purchased another office building in Northwest Austin as the company begins work on two new developments in that sector.

Aspen bought the 118,745-square-foot Plaza on the Lake building just off Capital of Texas Highway near Lake Austin from Prime Real Estate Equities I LP, a partnership between USAA Real Estate Co. and Prudential Real Estate Investors. The building takes Aspen's local portfolio to 2.5 million square feet, making it one of the area's largest landlords, and strengthens its position as a major owner of Class A space in the Northwest submarket.

Set on 4.5 acres overlooking Lake Austin, the three-story Plaza on the Lake building is currently 78.4 percent leased. The property gained recognition in 2005 when it received "The Office Building of the Year" award from Building Owners and Managers Association International.

Aspen declined to say how much it paid for the building; the property is currently assessed at $18 million, according to Travis County tax rolls.

"Plaza on the Lake is a one-of-a-kind property -- the type that's not likely to be replicated, given its spectacular location on Lake Austin," says John Tworoger, founder and CEO of Aspen. "Since it's the kind of building you can't replace, you want to keep it in your inventory forever."

Meanwhile, Aspen is constructing more than 315,000 square feet of office space via two projects in the Northwest submarket. The firm is adding 210,720 square feet in the first new building at the renamed Park on Aspen Lake, which was formerly called Tower of the Hills. A second phase expected to begin before year-end will include another 316,000-square-foot building, and the entire project will eventually total about 1.61 million square feet of space. Work also continues on a 105,000-square-foot addition at the company's Prominent Pointe development that will bring a three-story building with a fitness facility and parking garage to that property.

Once the buildings under construction are finished, Aspen's total Northwest portfolio will rise to 2.1 million square feet spread among nine Class A and Class B properties.

With 30 years of development under its belt, Aspen has dramatically expanded its holdings in Austin since 2004, and established a second base here in addition to an existing one in San Diego. Beyond its local development pipeline, the company also has more than 2 million square feet in the works in San Diego.

Investment activity in Austin continues to rise. A number of office property sales have been announced so far this year, including Austin Centre, which is being bought by an affiliate of Chicago-based Walton Street Capital, and Los Angeles-based Thomas Properties Group's purchase of the 3.4 million-square-foot Equity Office-turned-Blackstone portfolio. Last year, Austin recorded 28 sales of office buildings over 30,000 square feet for a total of $1.02 billion, according to a report from the Austin office of Sperry Van Ness. The report shows occupancy in the Northwest sector stood at 88.2 percent at the end of 2006.