An office complex next to Apple’s future $1 billion campus could be significantly expanded in the coming years, with potential homes for new restaurants and tons more room for companies in an in-demand market.
Landlord Accesso Partners LLC plans to build another 800,000 square feet of office space at 7700 Parmer, said Michael Adams, the company’s director of asset management in Texas. The Hallandale Beach, Florida-based real estate investment firm in 2015 acquired 7700 Parmer, a massive business park where the likes of Google Inc., Paypal Inc., eBay Inc., Deloitte, Electronic Arts Inc. and Polycom Inc. already lease space.
Based on demand, construction on the first of the new office buildings could begin sometime next year, said David Putnam, a principal at Aquila Commercial LLC and broker for 7700 Parmer.
Accesso is also expanding its other Austin asset, the nearby Riata Corporate Park in Northwest Austin, by adding another three-story, 64,000-square-foot office building. Construction on that building, designed by The Beck Group, could begin before the end of the year.
Riata Corporate Park is currently 100 percent leased.
The existing site development permit for Riata Corporate Park allows for the ninth office building, Adams said. A building permit hasn’t been obtained yet.
Adams said he expects net leases in the new Riata building to be around $28 to $29 a square foot.
“[Northwest Austin] is a pretty tech-heavy submarket, and a lot of the companies out of California seem to be coming to Austin because of the reduced cost for office space compared to the Bay Area,” Adams said. “It seems like downtown Austin is becoming very expensive. It is a little less expensive in the Northwest submarket and all of these tech companies can kind of cluster together.”
Count Apple among the believers. The iPhone maker expects to open its $1 billion campus at Parmer Lane and Dallas Drive in about three years. In the meantime it is leasing up space across North Austin, including earlier this year taking all of building eight at Riata Corporate Park.
The Northwest Austin office submarket is one of the strongest in the city with a vacancy rate of 9.6 percent in the first quarter, according to NAI Partners. The gross average lease rate is $33.25 a square foot.
Marc Vanderslice, a senior vice president at CBRE Group Inc., agreed that demand in Northwest Austin is high. He said companies are seeking out The Domain first, but since there’s virtually no space available there, they are looking to lease nearby.
Employers want the amenities offered at The Domain and to lease near where their employees live in North Austin or nearby suburbs, he said.
Back to 7700 Parmer
The 138-acre 7700 Parmer campus currently has 955,000 square feet of office space among four buildings originally built for Motorola. Its 99 percent leased.
“We are excited about the interest we have seen so far,” Putnam said. “We believe it will be a great opportunity for an existing customer to expand or accommodate new requirements that aren’t here yet.”
Apple’s new Northwest Austin campus is already attracting more companies and more interest to the area, Putnam said.
“The Parmer Lane corridor is going to continue to grow between MoPac and Cedar Park,” he said.
Adams said Accesso received a zoning change from the city of Austin last year to allow for the additional square footage of office space and retail.
Accesso is working with Studio8 Architects for the campus’ master plan but Adams said he expected the office space will be divided among six to eight buildings.
The new buildings will be constructed on existing surface parking lots and parking garages will be added, Adams said.
Putnam said the new buildings will each be around 120,000 square feet, smaller than the existing buildings that are between 180,000 and 350,000 square feet.
Adams said about 30,000 square feet of retail is also proposed for the ground level of a parking garage planned for along Parmer Lane. There may be as many as three restaurant pad sites along Parmer Lane, he said.
Accesso is also considering adding a multifamily component to the campus, between 300 and 400 units, which would require a zoning change from the city of Austin, Adams said.
“We wouldn’t be trying to recreate The Domain or anything, but with the amount of office space that we would have at our site and with Apple basically next door there would be a lot of people working in that area,” he said. “We think the live, work and play (concept) is something that seems to go over pretty well in Austin.”
Putnam also noted 7700 Parmer has best-in-class amenities for an office campus that includes a fitness center, large café, softball and soccer fields, sand volleyball courts, a pavilion and daycare center.
6/19/2019