congress - loopnet
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| OFFERING SUMMARYAUSTIN TEXAS
C O N G R E S S
EXECUTIVE SUMMARYHFF has been exclusively retained to offer to qualified investors the rare opportunity to acquire 506 Congress (the “Property”), an adaptive mixed-use building totaling 21,776 square feet on the historic Congress Street in Austin, TX. Originally built in 1936, the Property is 100% leased to two office tenants with Broadway National Bank occupying the ground floor retail space. With office and retail rents significantly below market and a short weighted average lease term remaining, investors have the ability to immediately push value via mark-to-market opportunities. 506 Congress’ unrivaled location, value-add potential, and proximity to Austin’s main demand drivers combine to make it one of the most compelling mixed-use offerings in the United States.
PROPERTY OVERVIEWAddress 506 Congress Avenue - Austin, TX 78701
Occupancy 100%
Size 21,776 SF
Acres ± 0.19
Year of Completion 1936 / 2008
Number of Floors Three (3)
Tenants 3
Zoning CBD
Historical Designation Not Applicable
Capital View Corridor Not Applicable
The offering can be bid in conjunction with the 327 Congress offering or independently
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3O F F E R I N G S U M M A R Y
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INVESTMENT HIGHLIGHTSSTATE OF THE ART MIXED-USE ASSET WITH REDEVELOPMENT OPPORTUNITY
The Property is a unique mixed-use building along Congress Avenue that is surrounded by some of Downtown Austin’s most popular demand drivers. 506 Congress’ prominent positioning between 5th and 6th street, provides investors the opportunity to pursue potential re-development opportunities.
506 Congress is zoned “CBD” which has no use restrictions or parking requirements. The favorable zoning, 25:1 floor area ratio along with the Property not being located in the Capitol View Corridor allows investors the ability to maximize density.
With the continued improvement of Congress Avenue’s walkability, investors have the option to turn the front parking spaces into a street patio, further enlivening the district and driving traffic to the Property’s ground floor retail.
Renovated in 2008, 506 Congress features state of the art office space with modern finishes, fitness center and a 4th floor rooftop deck providing Downtown Austin skyline views.
5O F F E R I N G S U M M A R Y
PRIME LOCATION IN DOWNTOWN AUSTIN
Located steps away from the State Capitol building in an infill location of a historical district in Downtown Austin, 506 Congress benefits from a lack of future competition due to limited available land and high barriers to entry around Congress.
Downtown Austin is home to more than 90,000 daytime employees and a growing residential base of more than 14,000 people. With an influx of apartment, condominium, retail and office developments, the Downtown core has transformed Austin into a 24-hour city.
Downtown Austin remains the entertainment nexus for the city and boasts the largest density of bars and restaurants in the city. Residents and visitors alike have many different districts and areas to choose from all with different characteristics including: Sixth Street, 2nd Street & Greenwater, Rainey Street and the East Side among others.
Boasting a 97-walk score, 506 Congress is a short walk to Austin’s best natural amenities including Butler Hike and Bike Trail, Auditorium Shores, Zilker Park and Bat viewing the Congress Avenue Bridge.
200+ RESTAURANTS
145+ BARS
135+ RETAIL STORES
DOWNTOWN AUSTIN
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S. 1ST ST.S. 1ST ST.
N. LA
MAR B
LVD.
N. LA
MAR B
LVD.
CONGRESS AVE.
CONGRESS AVE.
GUADALUPE ST.
GUADALUPE ST.
W. CESAR CHAVEZ ST.
W. CESAR CHAVEZ ST.
W. 6TH ST.W. 6TH ST.
New Library New Library
AuditoriumShores
AuditoriumShores
Austin Convention
Center
Austin Convention
Center
TEXAS STATE CAPITOL
TEXAS STATE CAPITOL
Lady Bird Lake
Lady Bird Lake
AUSTIN-BERGSTROMINTERNATIONAL AIRPORT
Tech ATX O�ce
C O N G R E S S
7O F F E R I N G S U M M A R Y
DIVERSIFIED RENT ROLL WITH MARK-TO-MARKET OPPORTUNITIES
506 Congress is 100% leased to Broadway Bank, Edelman, and Thirteen 23. The Property’s office component, which makes up approximately 79% of the total net rentable area has in-place rents of $25.78 PSF NNN, well below the $42.00 PSF NNN rate that current office leases in downtown Austin are being signed.
Broadway Bank, the Property’s sole retail tenant is currently paying $37.00 PSF NNN, approximately 38% below where retail leases are being executed along Congress Street.
With leases significantly below market, investors have the ability to immediately create value by marking tenants to market upon their lease expiration or re-leasing at a market rate.
OFFICE MARKET RENT OVERVIEW
$50
$40
$30
$20
$10
02019 2020 2021 2022 2023 2024
In-Place Rent Downtown Rent
$10
$15
$20
$25
$30
$35
$40
85%
87%
88%
90%
92%
93%
95%
2010 2011 2012 2013 2014 2015 2016 2017 2018
MSA
Ren
tal R
ates
MSA
Occ
upan
cy
MSA Rental Rates MSA Occupancy
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
MSA Deliveries MSA Absorption
$94
$95
$96
$97
$98
0
10%
20%
30%
40%
2010 2011 2012 2013 2014 2015 2016 2017 2018
MSA
Occ
upan
cy
MSA
Ren
tal R
ates
MSA Occupancy MSA Rental Rates
120,000
100,000
80,000
60,000
40,000
20,000
0
-20,000
-40,000
-60,000
-80,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
MSA Deliveries MSA Absorption
Made with
STRONG SUBMARKET FUNDAMENTALS
Downtown hosts an impressive roster of employers including the Whole Foods world headquarters, Google, Expedia, Facebook, Indeed, Cirrus Logic, and countless law, engineering, government, real estate and high-tech companies.
With occupancy of 94.3%, Downtown office owners benefit from the limited threat of new construction and rising rental rates from an increasingly tight market. With Downtown Austin’s scarcity of available land, demand is far exceeding supply with positive absorption eight of the last nine years.
The Downtown Retail Submarket is currently 97.0% leased with occupancy never dipping below 94% going back to 2007. With limited available space and minimal new deliveries, the submarket has experienced eight consecutive years of rent growth.
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WAKE UPStart your morning with a workout at the 506 Fitness Center or Soul Cycle
Enjoy an espresso from Houndstooth Coffee Shop at the ground floor of Frost Bank Tower
WORKWalk two blocks to work at 506 Congress
Grab Cooper’s Old Town BBQ for lunch and eat on the lawn of the Capitol Building
WALKGet your outdoor fix and take a walk around Lady Bird Lake
Head back In time to watch the bat viewing at sunset on the Congress Bridge
SHOPStroll down second street, stopping by Urban Outfitters, PRIZE, ModCloth and Bonobos
DINE & PLAYDine at Second Bar + Kitchen or one of the many restaurants on Congress Avenue
Continue your night with drinks at Elephant Room before going home to the Ashton
DAY IN THE L IFE
9O F F E R I N G S U M M A R Y
THRIV ING AUSTIN ECONOMYAlthough it maintains a laid-back vibe, the city dedicated to “Keeping Austin Weird” shows no signs of slowing down. A booming economy, growing job market, high quality of life and low cost of living make Austin a sought-after city for all ages. As one of the nation’s top economic performers, Austin is a thriving city with a young, highly educated and vibrant population that attracts business and tourism. The metro leads the nation in terms of population growth, fueled largely by the strongest rate of in-migration with an impressive 151 people moving to the city a day. The 11th largest population among U.S. cities, Austin’s population has expanded 23% between 2010 and 2017. The population explosion of the Texas capital, which reached approximately 2.1 million last year, is expected to soar 98.5% to nearly 4 million by 2040. Nearly doubling in size, Austin’s population is projected to grow faster than any other large U.S. city in the next 25 years. Named among Forbes 10 Best Cities for Jobs, Austin has one of the best job markets in the nation with a trend of nearly 20-year lows in the metro’s monthly unemployment rate. In the 12 months ending in October 2018, the Austin metro added 40,400 net new jobs, a growth rate of 3.9% and the seasonally adjusted unemployment rate is currently 2.7% (4.0% nationally).
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AUSTIN TEXAS#1 BEST PLACE TO LIVE IN THE U.S. 2017, 2018 & 2019!
- U.S. News and World Report
NO. 2BEST JOB MARKETAMONG TOP 50 METROSSource: Forbes
NO. 2 FOR ECONOMIC PERFORMANCESource: Milken Institute
POPULATION GROWTH 2006-2016
AUSTIN TEXAS+36% +19% +8%
USA
Source: Austin Chamber
39%INCREASE
NATION LEADINGEMPLOYMENTGROWTH
(2004-2017) Source: Austin Chamber
11O F F E R I N G S U M M A R Y
HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.
DEAL TEAM
WALTER SAADManaging Director
CATHY NABOURSManaging Director
KYLE SHAFFERAnalyst
JOSH VILLARREALAnalyst
DebtKYLE SPENCERSenior DirectorT: 512-532-1921