Buchanan, B3 Turn Austin Office Building Into Medical Condos

Buchanan Capital Partners and B3 Commercial showcased their creativity to breathe life into a South Austin office complex.

The joint venture purchased the former AT&T call center at 4544 South Lamar Boulevard in early June and has since converted it into medical condos, the Austin Business Journal reported.

Buchanan and B3 acquired the 110,300-square-foot complex from an LLC tied to California-based Legacy Partners. The sale price was not disclosed, although it came at a steep discount, giving the buyers plenty of overhead to repurpose the site, Buchanan founder and managing principal Keith Buchanan said.

The medical condos have already seen demand. Austin Gastroenterology bought a 31,400-square-foot space, and Southwest Dermatology and Vein Clinic purchased 10,000 square feet. The first wave of buyers benefited from discounts of up to 40 percent.

Roughly 68,300 square feet of divisible space is available. The remaining condos, marketed by Centric Commercial, are priced at $335 per square foot, lower than similar properties in the area, which typically sell for around $500 per square foot, the outlet said.

The available condos are cold-shell spaces, ready for customization. The upper floor features ceiling heights of 15 to 16 feet, ideal for clinics and surgery centers. The lower level is suitable for various commercial uses such as daycares, gyms and creative flex offices.

Exterior renovations are underway, with McKinney York Architects handling them, the outlet reported.

Buchanan and B3 bought the property at a discount due to a struggling office market, which has been grappling with record-high vacancies since the pandemic sparked the remote-work era. With no clear recovery in sight, many office landlords are opting to sell their assets at a loss, especially with foreclosure threats looming large.

Office-to-residential conversions have also become increasingly common in recent years in response to a beleaguered office market. However, office-to-resi candidates are scarce in Austin due to the quantity of newer office buildings that make up the city’s skyline. Old office properties are typically best suited for such conversions, which is why they’re more common in cities like Dallas and Chicago.

Yet, the South Lamar project shows that there are a number of ways to repurpose a struggling office asset beyond turning them into apartments. Another example: NexPoint Advisors is redeveloping the 1.6 million-square-foot former Electronic Data Systems campus in the Dallas suburb Plano into a $4 billion life sciences and medical center.

—Quinn Donoghue