High-rise office tower sold!

700 Lavaca Street, a 315,000 SF, 15-story building with a 675-car garage was put under contract for $61,250,000 or $194.80/sf in mid January.  The seller is Travis Realty Corp and the buyer is Travis County.  The buyer was motivated to buy because of the current shortage of county office space estimated to be 31% (forecast to widen to 53% by 2015 if nothing is done) according to a strategic analysis performed by Broaddus and Associates.  Amenities at time of sale included 24-hour security and card access system, adjacent parking garage with tunnel to building, on-site management, maintenance, full-service bank, and on-site Murphy’s Deli.  The most recent land sale showed a value of around $265/sf in September 2009.  Based on simply looking at the highest and best use as vacant and as improved, you can see the improvements have suffered a significant amount of depreciation.  However, the question is whether the contract was arm's length and how was the price established (income, sales, or cost).

For the full study done by Broaddus and Associates, see http://www.co.travis.tx.us/facilities/central_campus_study/default.asp