The Property (“JLL Plaza”) is a 116,000 (+/-) boutique, Class A office building strategically located at the western gateway of Austin’s CBD.  Its irreplaceable location, high-quality construction, unrivaled access to Austin’s major transportation arteries, commercial services and desirable residential neighborhoods, make JLL Plaza an institutional quality asset.

Though an outlier investment for us, we saw a unique opportunity to acquire a truly singular boutique office asset from a Seller motivated to liquidate its Austin holdings. We viewed and continue to view JLL Plaza as a boutique office asset without peer in downtown Austin. Though we set a record in the market at the time of our purchase on a PSF basis, we were confident that the quality of the asset, its desirable in-fill location that forms the western border to Austin’s CBD to be irreplaceable. We surmised correctly that the ingress/egress characteristics of the Property would be well received in the market.

In addition to the Property’s attractive physical (Leeds Gold Certified) and locational attributes, we believed there was significant opportunity to strengthen its rent roll via lease buyouts and execution of releasing strategies that would enhance long-term value.  Since our acquisition of JLL Plaza we have reconstituted eighty percent of its tenancy resulting in longer lease maturities and enhanced tenant credit, including new leases with JLL, Ericsson and BBVA.  A second refinancing of the asset is set to occur during Q219, which is expected to repatriate some investor equity.  Despite the downtime and capital costs associated with our releasing strategies, the Property has achieved a 5% return since inception; however, an 8.0% annual return is forecast following recent releasing activity.  We have also declined unsolicited purchase offers well in excess of our investment basis.