From empty to full: Capitol Tower deal proves fruitful - Austin Business Journal:

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of Detroit and of New York purchasec Capitol Tower in the summer of 2006 for anestimated $13 millionm as part of a $28 millionh two-building deal, according to Real Capita Analytics. Renovations began early in 2007 with an estimated price tag ofroughlyy $10 million. Some finishing touches still remain, includinf the installation of a new crown on top of the A series of tenantsincluding high-profile Dell Inc. advertising agency DaVinc have signed on to occupythe 20-story buildinfg at 206 E. Nintyh St. At 70,000 square DaVinci's lease was the largest, taking up four of the top includingthe building's penthoused space and a rooftop terrace.
It's also the largest one-timer lease in the Central Busineszs District inrecent years. Othe leases include full-floor deals for and ad agencyu . The building is now 98 percent leased with justa 3,100-square-foo t space remaining open. Derek Land, partner in the Austin officeeof , steered leasing on the property. Land says his team's strategy of not biting at the first deal helped them to land a good tenanft mix and fill the building despit the sluggish leasing landscape ofrecent months. Stream began with a 6,000-square-foogt office lease for .
That lease allowed Stream to move Prosperity, which wasn't yet occupying the space, aroundr to different floors as needed to accommodatseother tenants' needs. Next was the LatinWorks which Land says helped buildup buzz. "I think we did some aggressivee deals early on withmore concessions, and that createfd some momentum," he says. "We were also creative with where we put tenants and allowed ourselvesw the flexibility we needes to give the tenants the full floorssthey wanted." The average annual rent rate in Capitol Tower is $25 per squarwe foot, according to research from . That's on par with the averagwe rental rate across all buildingv classes inthe CBD.
Land says Stream had a few high-rentt offers for sections of the top but decided to wait instead and try to land a multifloor tenant. The gamble paid off. DaVincoi wanted a high-profile office in a vibrant area of town that would help draw the creative employeesz they arelooking for. Though other downtowbn options existed, the ad agency was attracter by the largely contiguous space and therooftop amenity. Land says anothef selling point for DaVinci was that it couldd take space within a mattertof weeks, something they needed to allow for operationsx to begin quickly. Erin Morales and Charlese Dixon in the Austin officeof Inc. negotiatedx the lease on behalfof Total: 8.6 million s.f.
Amount absorbedd in Q1: About 15,000 s.f. Amount vacan t in Q1: 13.9 percent Citywide vacancy ratein q1: 14.5 percen