SW Austin getting new office space - Austin Business Journal:

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(Nasdaq: STRS) will begin constructio on a $6 million, 77,500-square-foot office buildingf in Southwest Austin earlynext year, says Beau president and CEO of the Austin-based real estate company. The new buildingb will be a partof Stratus' 500-acre Lantana developmen off Southwest Parkway. It will be the fourthg office building inthat development. Real estate experts say the move is significantbecause it's the firsgt time a developer has decided to move forward on this kind of spacr without a tenant since the market went soutn earlier this decade. It's a sign the Austin officde market, and specifically Southwest Austin's, is on the experts say.
That sentiment is sharee by Armstrong, who says the goal is to have the buildingt finished about the same timethe market's rebounds is in full swing, which he predicts will be next The $6 million prices tag covers the cost of the two-story shell beforee the interior is complete. Acknowledginh the risk, Armstrong says "aa gut-check moment" will occur before Stratuas breaks ground. But he also says there isn't much space on the market in thatsectodr now, and "it won'y take long for rental rates to reach the point wheree new construction makes sense." Stratus now has 240,00p square feet of office space in Southwest which is 100 percent leased, Armstrong says.
One of key tenants is Austin-based (Nasdaq: SLAB), which has a substantial presence at7000 W. William Cannon Drive. The decision to start constructionis "an encouraginy sign," says Diana Holford, president of The Staubacnh Co. Central Texas LLC. "The market has definitely picked up. His timing may be very Holford says, adding that the Southwest sector has one of the lowesty vacancy ratesin town. That's supporter by a recent office market study which found the Southwestt sector has the highest occupancy level in town and some of the highesgrental rates. According to a studt by Austin's NAI Commercial Industriall Properties Co.
, the occupancy levelk for the Southwest sector was 88 compared tothe city-wide average of 80 Average rental rates were $19.84 per squares foot in Southwest Austin, second only to the Centrap Business District's $21.47 per square Stratus isn't alone in its read of the Southwest sectorr making a comeback. In May, Austin-based developer Hill Partnerws Inc. said it was pulling its planas back outfor 90,000-square-foot office building in San Clementse at Davenport.
At that time, Principal Sam Houstob said the company was lookingt to begin construction in May and the building would take 10 to 12 months to Houston couldn't be reached for Also in May, Dallas-based Prentiss Propertiews Trust (NYSE: PP) said it recentlgy received a building permiyt for two office buildings with 211,000p square feet on a 20.6-acre site at MoPadc Expressway and South Capitapl of Texas Highway.
Prentisss has said it doubts it will builfd the space on aspeculative