The Austin office market is facing challenges due low demand and excess space, but one development could reset expectations amid a recent ownership restructuring.
Fenway Capital Advisors, previously a minority investor, is now the primary equity partner in Eastbound, a 233,500-square-foot office complex at 3232 East Cesar Chavez Street, Austin American Statesman reported.
Fenway has brought in new capital and a more aggressive leasing strategy that includes tenant improvements and move-in ready spaces to attract small to midsize companies.
The ownership group, which includes developers Lincoln Property Company and Kor Group, plans to build out 46,000 square feet of office interiors, with suites ranging from 5,000 to 41,000 square feet. They’re expected to be ready early next year.
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Their approach aims to address the needs of technology and creative firms in East Austin, which prefer ready-to-use spaces.
Completed two years ago, Eastbound features two four-story Class A office buildings with amenities such as outdoor work areas, rooftop terraces, a fitness center and bike storage. Eastbound, like many office buildings, has struggled with tenant acquisition due to shifts in the office market following the pandemic.
The office vacancy rate in Austin hit a record 25.2 percent last quarter. About 158,000 square feet of space came on the market without being leased, according to JLL.
Eastbound’s tenants include Dallas-based landscape architecture firm TBG and North Carolina-based Furniture Marketing Group, a buying group that enhances the purchasing power of independent furniture retailers.
“We’ve secured new capital and paid off our construction loan, which allows us greater flexibility to meet the market,” said Seth Johnston, Lincoln’s executive vice president. “We are now in a position to fund tenant improvements, offer move-in ready space, and execute leases.”
Johnston and Trish Williams are handling leasing at Eastbound.
— Andrew Terrell
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