Turnbridge Equities completed a $500 million recapitalization deal on Music Lane, a commercial strip that has been transformational for Austin, Texas.
New York-based Turnbridge developed the urban mixed-use project, an assemblage of properties on 15 acres at 1007-1221 South Congress Avenue. The recapitalization of Music Lane frees up funds to renovate two of the company’s South Congress multifamily properties, said Andrew Joblon, Turnbridge managing principal.
In a month or two, Music Lane will be home to a new Hermes store, offering a level of luxury retail Joblon said he thought he’d never see in Austin. “When we first entered the Austin market in 2015,” Joblon said, “we were looking for a great market that is domestically fueled rather than relying on international capital, as many big cities on the coasts tend to do.” Austin needed an iconic “high street,” he said, similar to those in comparable cities.
The retail and office complex has three contiguous sections, or phases. Atlanta-based Invesco recapitalized the first phase, which includes commercial buildings and Muse, an apartment complex at 1007 South Congress Avenue. MSD Capital, headquartered in New York, recapitalized buildings from the other two phases and the Lola apartments at 1221 South Congress Avenue.
Muse and Lola have more than 400 apartments between them. Joblon said Turnbridge will renovate both complexes to the tune of roughly $40 million. Renovations are intended to bring the complexes up to a class category that’s consistent with the upscale retail and other commercial tenants in its Music Lane properties, Joblon said.
Designed by premier architecture firm Lake/Flato, Music Lane is home to high-end retail businesses and offices for marquee commercial firms. Soho House anchors one section of the development. Retail tenants include Alice and Olivia, Frame, Rag and Bone, Reformation, Lululemon, Nike and Equinox. Firms such as Deloitte, Gensler and Brevan Howard have offices there.
On South Congress, said Joblon, they saw a lot of foot traffic, mainly from people patronizing local food and entertainment businesses such as the Continental Club or Perla’s—and very few national retail tenants. Turnbridge saw an opportunity to take advantage of the street’s commercial potential, and Music Lane and its surrounding development is the result. Where South Congress had a lot of tourist traffic, said Joblon, there’s now local traffic.“Sales at the retail level,” he said, “have exceeded all expectations.”
UPDATE: This story has been updated to clarify the total number of acres and full range of addresses of the properties involved in the recapitalization.