L.A. firm to renovate 1M sq.ft. Austin office campus
Karlin Real Estate has big plans for complex it wrested from developer Nate Paul
Karlin Real Estate, a Los Angeles-based firm with extensive holdings in the Austin area is planning a massive makeover for a 156-acre office campus in the northwest of the city that was once home to 3M.
The vacant complex has 1.1 million square feet of rentable space and is near the intersection of RM 2222 and RM 620. It will be renamed Highpoint at 2222, and Karlin hopes to land a single large tenant for the renovated campus, according to the Austin Business Journal.
CBRE is handling leasing for the project.
Karlin plans to spend “hundreds of millions of dollars to just totally renovate and repurpose this campus,” said Mike McGlashan, the firm’s Austin-based vice president of acquisitions and development.
The property has been vacant since 3M moved out in 2019 and was once part of local developer Nate Paul’s crumbling empire World Class Holdings. Paul purchased the sprawling campus in 2017 with plans to renovate, but defaulted on the loan two years later. Karlin acquired the debt and foreclosed in June 2021.
Karlin, which currently owns about 4 million square feet of office space spread across 13 properties in and around the capital city, is embroiled in another legal wrangle with Paul over control of Offices at Braker, a portfolio of 11 properties in North Austin.
Karlin-owned shell company ATX Braker has been pursuing a foreclosure sale of the 45-acre office campus. ATX Braker issued an original $29 million mezzanine loan for the campus and later acquired a $63 million senior mortgage on the office park from JP Morgan.
Paul put the foreclosure on hold in July when an affiliate of World Class Holdings filed for Chapter 11 bankruptcy — a common strategy of real estate debtors who are facing foreclosure and want to buy time for refinancing or sale.
A date of September 29 was finally set for the auction earlier this month, but Paul could possibly still keep control of the properties. Since selling off his self-storage portfolio for more than half a billion dollars in March, Paul has used the proceeds to buy up several former World Class assets at foreclosure sales.
— Bill Egbert