Alexandria Real Estate Equities is coming to Austin.
The Pasadena-based REIT has purchased the Teacher Retirement System of Texas office in Downtown Austin, federal filings show. The 3.8-acre site, comprising two parcels at 1001 Trinity Street and 1020 Red River Street, sold for $108 million.
While Alexandria has not filed redevelopment plans for the site, it notes in its third-quarter report that the land can hold a 323,000- square-foot development. Alexandria, a pioneer in commercial real estate developments tied to the life science boom, is all but certain to convert the property into a life sciences facility. The parcels that make up the site are zoned for Austin’s versatile downtown mixed-use district, which permits a wide range of uses.
The property has been fully exempt from property taxes as part of the portfolio of a state-owned entity.. At its current appraised value of $31 million, Alexandria could be on the hook for a $670,000 tax bill at Travis County’s 2.17 percent property tax rate. That number could increase significantly with a value-add redevelopment.
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Alexandria’s portfolio covers some 74.5 million square feet across the country, but this appears to be one of its first investments in Texas. Since its founding in 1994, the firm has focused on building property “clusters” in coastal innovation hubs like Seattle, San Francisco and Boston.
Austin is growing into a life sciences lodestone. The Austin metro area is home to 300 life sciences companies with some 18,000 employees, according to the Austin Chamber of Commerce. Feeding that growth is the Dell Medical School at the University of Texas at Austin, which opened in 2016.
The Teacher Retirement System will stay in the offices for two years as it prepares to move to new digs in the Mueller Business District in northeast Austin. The fund moved into the center in the early 1970s, when it employed just 200 people for its 300,000 members. Today, the system is the largest public retirement system in Texas, with $183.4 billion in assets under management, 1,000 employees and nearly 1.9 million members.
Alexandria did not return a request for comment.