Hines is returning to the office market with a $151M bet on Austin.
The global real estate investment management giant acquired a 206K SF office at 405 Colorado St. from Brandywine Realty Trust as it selectively targets trophy office assets with high occupancy, Hines announced Monday.
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The deal comes as institutional capital is increasingly eyeing top offices as prime acquisition targets, wagering that the flight-to-quality that has defined leasing trends since the pandemic and the rise of artificial intelligence will position the best properties to capture outsized rent and value growth.
“We’re investing where we see the potential for strong alignment between income durability and attractive pricing,” Alfonso Munk, Hines’ global co-head of investment management, said in a statement. “We believe the U.S. office recovery is underway, with demand concentrated in fully leased trophy assets.”
Hines made the acquisition through Hines Global Income Trust, its nontraded public REIT, and paired the announcement of the deal with the disclosure of its purchase of Wicker Park Commons, a grocery-anchored retail center in Chicago.
The purchases reflect conviction at Hines and across the broader real estate landscape that value will be unlocked more at the property than the sector level.
“Fundamentals are driving performance, and opportunities today are increasingly defined by operational strength,” Munk said.
The boutique office tower in Austin is fully leased to a diversified tenant base that includes JPMorgan Chase, Bain & Co. and AllianceBernstein. Hines didn’t disclose the seller, but the sale and price for the office tower and its 520-space parking garage was disclosed by Brandywine in a filing with the U.S. Securities and Exchange Commission on Thursday.
Brandywine is planning to sell up to $300M in real estate assets this year, with a focus on its highest-performing office assets, CEO Jerry Sweeney said in February, the Austin Business Journal reported.
Houston-based Hines reached a deal in April to acquire the 183K SF, Lowe's-anchored retail center in Chicago for roughly $70M, a nearly $25M discount from its last purchase price in 2015, CoStar News reported in May. DWS Group, a leading European asset manager based in Germany, was the seller.
Hines first signaled interest in European office assets in May, when the asset manager said the region was primed for a “selective but compelling buying opportunity” as tenants similarly flocked to the highest-quality buildings.
It’s also building offices in the U.S., notably with the development of a sprawling mixed-use community north of Miami. The 5.6-acre development from Hines and Urban Street Development includes a 180K SF office building — built using Hines’ heavy timber construction called T3 — along with 601 apartments and more than 70K SF of retail space.
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