Travis County Hospital District Buys North Austin Office

Central Health is putting its own spin on the office conversion amid a broader push for public sector entities to own real estate rather than lease.

The Travis County-funded hospital district purchased the Northview Business Center, a 260,000-square-foot office building on roughly 25 acres at 9001 North I-35, according to county property records. The Austin Business Journal reported that the deal closed Dec. 9, with the seller listed as Chicago-based Northview Owner.

The purchase price was not disclosed in public records, but the Travis Central Appraisal District most recently valued the site at $18.6 million for tax purposes. Internal documents signal a much larger financial commitment. Agenda materials prepared for Central Health’s Oct. 22 Budget and Finance Committee meeting show the district proposed issuing $93.5 million in debt to acquire the property.

Discussions about the acquisition were held in closed session, but the agenda documents describe the Northview property as a “priority need area” and outline plans to transform the office building into adult and pediatric clinical offices, along with clinical support space. The move is intended to help Central Health transition services out of leased facilities, though the district has not specified which clinics would relocate, according to the publication.

The property is not entirely vacant. About 70,000 square feet is currently leased through 2029, according to the same documents. One of the existing tenants appears to be Workforce Solutions Capital Area, based on publicly available listings tied to the address.

The acquisition adds to a growing list of public-sector real estate deals reshaping Central Texas, as government entities increasingly opt to buy large office properties amid softer market conditions. Travis County recently approved the use of eminent domain to acquire an East Austin landfill it is being sued over, while the city of Austin has been especially active.

In recent months, the city has purchased a former motorcycle dealership, paid $87 million for Tokyo Electron’s former Southeast Austin campus, spent $107.6 million on the One and Two Barton Skyway office buildings and shelled out $41.1 million for a 143-acre tract in East Austin. It also bought a 207,000-square-foot office building at 3300 North I-35 for $26.2 million.

City officials have framed those acquisitions as part of a long-term strategy to control costs by owning space instead of leasing, arguing that leasing can cost roughly twice as much over time.

— Eric Weilbacher