Ever since Endeavor Real Estate Group began work on the Domain in North Austin, the city’s commercial center of gravity has been shifting from downtown. That move continued late last week with a pair of new office building filings for the Mueller neighborhood northeast of the central business district.
The move comes amid a wave of subleases from some of the central business district’s biggest tenants. Meta has put nearly 700,000 square feet of space back on the market in the past year, and TikTok recently announced it would back out of 126,000 square feet at 300 Colorado.
Shorenstein, a real estate investment firm based in San Francisco, plans to build two four-story office buildings at 4901 Mueller Boulevard. Together, the buildings will span 333,700 square feet and connect through a 6-story garage. Nicknamed “Charlie” and “Delta,” the buildings are expected to cost $90 million. They mark the final pieces of what is expected to be an 800,000-square-foot, four-building portfolio of office developments by Shorenstein in Mueller.
The buildings were designed by Page Southerland Page, the design firm behind, among others, the luxury condo tower 70 Rainey. Work is expected to start in January 2024 and run for about two years.
Mueller is a 700-acre, master-planned redevelopment of the old Mueller Municipal Airport just east of I-35. Catellus, the Oakland-based developer overseeing the development, focused on new-urbanism tenets such as walkability and transit access in its plan. In all, it expects developers to put up some 4.75 million square feet of commercial space for 18,600 employees by the time the district is finished. As of a year ago, there were 130 businesses taking up 2.4 million square feet of office space in the area.
Major tenants include Texas Mutual Insurance, which has its 270,000-square-foot headquarters in the district. Catellus bases its regional operations out of the former airport building.
Shorenstein made a splash in Austin with early investments in the Domain, another master-planned community north of downtown. There, Shorenstin’s portfolio covered 630,000 square feet of office space and 25,000 square feet of retail. It sold the portfolio in 2018.
In January 2022, Shorenstein sold the first of its four Mueller buildings to the Teacher Retirement System of Texas. When Shorenstein finishes the second building in 2024, TRS will move its staff to the two offices. The pension system’s move to Mueller marks a major departure for a longtime tenant of downtown Austin. In October, TRS sold its downtown headquarters to Alexandria Real Estate Equities, a Pasadena-based real estate investment trust that has focused on building life sciences “clusters” in techy hubs such as Seattle and San Francisco.
Shorenstein did not provide comment on the project by press time.
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