A development project with an estimated cost of $12 million is on its way to Oak Hill on the southwestern edge of Texas’ capital city.
MFB Real Estate has plans to develop an office building at 5526 W. U.S. Highway 290 West in Austin, according to a filing with the Texas Department of Licensing and Regulation’s Architectural Barriers Project, the division which administers compliance with the state equivalent of the Americans with Disabilities Act.
The listed owner of the property is a company that has the same address as Austin-based MFB, which owns and develops land and commercial projects in Central Texas.
Plans for the four-story, 72,000-square-foot building include a four-story parking garage. SLG + Studio Architects is listed as the designer.
Plans for the Oak Hill property could change significantly, however. Developers might pivot to a larger multifamily project instead of an office building, MFB’s Jay Legg told The Real Deal.
The property has a 2022 appraised value of $2 million, according to county records. State registration records list an estimated construction cost of $12 million, or about $167 per square foot.
Nine large Austin office properties sold at an average price of $253 per square foot in 2022’s first quarter.
Southwest Austin office rent ranges from $35 to $55 per square foot, according to commercial real estate site Austin Tenant Advisors. Average asking rates for office rent in the city topped $53 per square foot in spring of 2022, CBRE reported recently.
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Nationwide, several factors have contributed to a downward trend in office development — and in some cities, led to serious consideration of converting office-to-multifamily conversions — the national trend is likely unrelated to MFB’s potential pivot.
The Austin office market has had three consecutive quarters of positive net absorption, and the city had the highest rate of office construction in the nation as a share of its inventory, according to a June CBRE report.